According to Reuters, a consortium led by Sina Corp is in talks to acquire at least 18% of Yoozoo Games.
Sina is working with China’s Twitter-like Weibo Corp and a Shanghai-based state investment firm, according to people who do not want to be identified due to confidential restrictions.
People said the consortium is in recent talks with Yoozoo Chairman Xu Fenfen to acquire at least 18% of the company. Yoozoo’s 18% stake is valued at approximately 2.86 billion yuan ($447 million), based on Friday’s $2.5 billion market cap of the Shenzhen-listed company.
Yoozoo, the developer company behind the popular mobile game “Game of Thrones: Winter Is Coming” declined to comment. Sina and Weibo did not immediately respond to requests for comment, a source said will build a special-purpose tool for the deal. In an exchange filing last week, Yoozoo said that Xu was considering issues with the share transfer and had made relatively significant progress.
The deal talks come as Sina, a small player in the $44 billion Chinese gaming market, wants to boost its growth in the gaming industry, which has been accelerating after the COVID-19 outbreak last year forced many residents to stay at home.
Reuters reported in April that Bilibili is in talks to acquire a 24% stake in Yoozoo Games as part of a deal worth approximately 5 billion yuan ($765 million). However, one source said he dropped the deal because the online video site wasn’t moving as fast as Sina. Bilibili did not comment on the matter.
As one of China’s first tech companies to be listed on the Nasdaq in 2000, Sina derives most of its revenue from online advertisements on news portals and Weibo. This has worried investors as the growth rate of Chinese online advertising has slowed, and Sina has also lost ground amid fierce competition with other tech giants like ByteDance and Tencent.