EQT, a private equity group, has slightly reduced its acquisition offer for Keywords Studios to around £2.1 billion (€2.4 billion). The revised proposal came as the video game services company, listed in London, announced delays and cancellations on several of its projects. The board at Keywords is considering endorsing the latest bid of £24.50 per share, down from EQT’s previous May proposal. EQT had put forward four unwanted bids for Keywords prior to advanced discussions about a proposed £25.5 per share bid last month. This earlier offer placed the Dublin-based organisation’s worth at about £2.2 billion, a premium of over 70 per cent on the share’s value when offered. However, the firm announced on Friday that a few of its larger game development projects would now be postponed into the second half of the year or cancelled. Keywords also warned of softer demand and forecasted a revenue rise of roughly 7 per cent for the first half of the year, with second-half organic growth of around 10 per cent, consistent with its midterm guidance. The firm provides a range of services from game art to marketing and testing and has previously partnered with major clients such as Activision Blizzard, Electronic Arts and Tencent on games like Fortnite and League of Legends. Listed on the junior Aim market in London since its flotation in 2013, Keywords’ initial market valuation was less than £50 million. However, concerns about the impact of artificial intelligence on its services, such as translation, have seen its share price halve from its peak in September 2021. EQT, one of the largest private investment firms in Sweden, has previously acquired UK-listed groups including veterinary pharmaceuticals firm Dechra.
In an upward revised proposal, EQT has submitted a cash bid offering £24.50 per share for Keywords, a notable increase of 13% compared to Keywords’ latest closing share value sitting at £21.72. This has slightly elevated from EQT’s previous submission on Wednesday, which proposed a per-share price of £24.30.
Engaging in discussions with EQT, Keywords finds itself in the midst of growing interest surrounding UK-listed corporations, a phenomenon not observed since the height of 2018. The lure of undervalued share prices has seen a surge of overseas investors gravitating towards the UK market. In response to this, Keywords has granted a minor delay in discussions until July 3rd. By this date, under UK acquisition laws, EQT must solidify their bid or withdraw their interest entirely.
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