Tencent in talks to buy Hay Day, Clash of Clans company

2016-05-24 07:12 - Pavel Alpeyev and Lulu Yilun Chen
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The title page of Clash of Clans on Google Play.

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Hong Kong - Tencent (which Naspers has a 34% stake in) is in talks to buy a majority stake in gamemaker Supercell Oy from SoftBank, the Wall Street Journal reported.

The discussions are at an early stage and it isn’t clear if SoftBank is talking to other potential bidders, the newspaper said, citing unidentified people briefed on the matter.

SoftBank is considering a sale of its controlling stake in Supercell after receiving interest in the maker of Clash of Clans, people familiar with the matter told Bloomberg News earlier this month. Talks have taken place with potential strategic buyers based in China and the Japanese company may choose not to sell a stake, the people have said.

A sale could value the whole of Supercell at more than $5bn, one of the people said.

Canny Lo, a spokesperson for Tencent, declined to comment on whether it was in talks to buy the stake. Matthew Nicholson, a spokesperson for SoftBank, declined to comment.

Games are among Tencent’s biggest businesses. Revenue from its Value Added Services unit, which includes online games and messaging, rose 34% to 25 billion yuan ($3.8bn) in the March quarter. In 2014, the company invested $126m in Glu Mobile, the San Francisco-based company that has produced smartphone games featuring Kim Kardashian and Katy Perry.

SoftBank acquired a majority interest in Helsinki-based Supercell for about $1.5bn in 2013. It increased that to 73% last year. The rest of the company is owned by the gamemaker’s management and employees.

Supercell has struggled to translate the global popularity of Clash of Clans into subscriber numbers in SoftBank’s home market. Buddy Marini, the head of Supercell’s Japan operations, has called the country “the toughest market in the world.”

Read more about: naspers  |  tencent  |  games