Game developer XPEC Entertainment Inc (樂陞科技) shares surged 8.57 percent yesterday on news that an investor unexpectedly launched a tender offer to acquire a 25.71 percent stake in the company.
XPEC on Tuesday said in a filing with the Taiwan Stock Exchange that investor Bai Chi Gan Tou Digital Entertainment Co (百尺竿頭數位娛樂) plans to purchase up to 38 million common shares of XPEC at NT$128 per share from yesterday to July 20.
That indicates a total of NT$4.77 billion (US$146.2 million) and represents a premium of 12.28 percent based on XPEC’s closing price of NT$128 yesterday.
If Bai Chi acquires a 25.71 percent share, its stake would increase from 5.39 percent to 31.1 percent, XPEC said.
The public tender was initiated by Japan’s Yoshiaki Kashino, who had invested in XPEC via private equity fund Mega Cloud VR Investment Ltd in December last year picking up a 9.84 percent stake in XPEC, the firm said in a statement.
Kashino invested in Bai Chi via another private equity fund, Oak Field, gaining access to control Bai Chi’s 5.39 percent stake in XPEC.
According to the Ministry of Economic Affairs’ Commerce Department, Bai Chi is a foreign company registered in Taiwan and controlled by a Japanese boss, with a paid-in capital of NT$50 million.
Kashino expressed interest in increasing his stake in XPEC several times in the past few months, but he did not inform the company when he made the offer on Tuesday, XPEC said.
XPEC said Kashino’s latest offer would not affect the company’s management ownership, as the current team still controls as much as a 48.53 percent stake in the company.
The company is to officially respond to the tender offer within 10 days after its independent board of directors reaches a conclusion in a review meeting.
Chinese-language online news provider Cnyes.com (鉅亨網) yesterday reported that Kashino has no intention of intervening in XPEC’s management within the next three years.
The main reason behind the tender offer is that Kashino thinks XPEC’s stock price has been underestimated and he plans to expand Japan’s gaming products and intellectual properties to international markets through XPEC, the report quoted Kashino as saying.
XPEC reported net income of NT$12.74 million in the first quarter, shrinking 51.28 percent from last year’s NT$26.15 million, while revenue reached NT$557.02 million in the first four months of this year, up 31.66 percent from NT$423.08 million made in the same period last year.
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