Tencent Reportedly Weighs $568 Million Bid in Game Developer Voodoo

The tech giant continues its aggressive pursuit of acquisitions.

Author: Anthony Russo   

Tencent Holdings Ltd. (HKEX: 00700; OTC TCEHY) is considering a bid for a minority stake in the French mobile game developer Voodoo for less than 500 million euros ($568 million).

The potential deal would give Tencent approximately 20% to 25% equity in Voodoo, as reported by Bloomberg today, citing people familiar with the matter. However, Tencent isn't the only potential bidder, as other firms are also interested in purchasing Voodoo's shares; the French video game maker Ubisoft Entertainment (OTC: UBSFY) and the American game developer Zynga Inc. (Nasdaq: ZNGA) are both vying for Voodoo. 

The Hong Kong-listed tech giant has been active in looking to acquire companies in the Covid-19 environment. Tencent has approached iQiyi Inc.'s (Nasdaq: IQ) controlling shareholder Baidu Inc. (Nasdaq: BIDU) about becoming the largest shareholder in the Chinese video streamer, as reported by Reuters in June. Tencent is also in "advanced talks" to purchase and privatize the Chinese-based video game company Leyou (HKEX: 01089), according to a separate Bloomberg report last week. It also agreed to buy the Chinese provider of auto solutions Bitauto Holding Ltd.'s (NYSE: BITA) in June. That deal is expected to close in the second half in 2020.

Voodoo's co-founders Alexandre Yazdi and Laurent Ritter are the majority owners of the company. Its gaming titles include Roller Splat and Snake VS Block.

At the close of trading in Hong Kong, Tencent inched 3% lower at HK$525 per share. Tencent has been thriving in the coronavirus crisis and is now hitting new all-time highs. In a likelihood, Tencent is nowhere near the end of its acquisition path and will continue to diversify its portfolio this year. 

Shares of Tencent in Hong Kong have surged nearly 40% year-to-date.