STOCKHOLM: MTG shares leapt as much as 25 per cent on Monday after the Swedish e-sports and gaming firm said Chinese live streaming platform Huya would buy a stake in its Turtle Entertainment (ESL) business and help it expand into China.
Huya, backed by Internet giant Tencent, will invest $30 million in ESL, giving the whole of ESL an enterprise value of $425 million, MTG said.
That is more than investors had priced into MTG shares, according to SEB analyst Mathias Lundberg.
“MTG owns 82 per cent of ESL, which values their stake at 3.4 billion Swedish crowns ($354 million), which is much more than investors had discounted in the share,” he said.
MTG shares jumped to a six-week high in early trade and were up 14 per cent to 86 crowns at 0925 GMT, valuing the company at around 5.7 billion crowns.
Huya and ESL, the largest e-sports company in the world, will also form a joint venture, while ESL will issue $22 million worth of new shares to facilitate further expansion, MTG said.
“We are excited to announce this term sheet for an important strategic partnership which provides us with a strong partner in Huya to pave the way for a successful ESL expansion into the thriving Chinese e-sports and gaming market in due time,” MTG Chief Executive Jørgen Madsen Lindemann said in a statement. — Reuters
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