Playtika sweetens offer to acquire Angry Birds publisher Rovio, now … – Morningstar

Playtika sweetens offer to acquire Angry Birds publisher Rovio, now … – Morningstar

By Wallace Witkowski
One analyst points to Playtika’s successful track record of monetizing free-to-play mobile games
Playtika Holding Corp. sweetened its all-cash offer for "Angry Birds" publisher Rovio Entertainment Corp. by a little more than 6% on Thursday, and one analyst feels the mobile games and monetization company could reinvigorate the 13-year- old franchise.
Coincidentally, Playtika (PLTK) shares fell as much as 6% to an intraday low of $9 a share, and were last down 2.7%. Rovio shares closed down 2.5% at 5.67 euros a share in Helsinki about an hour before Playtika made the announcement. Meanwhile, the S&P 500 index declined 0.7%, and the tech-heavy Nasdaq Composite Index was down 1%.
At about 83 million shares outstanding, Espoo, Finland-based Rovio has a market cap of 470 million euros. The new, nonbinding offer of 9.05 euros a share values Rovio at 751.2 million euros, or at a 60% premium.
Back in November, Playtika had offered 8.50 euro per share, but did not make the offer public. The company reported having $1.26 billion in cash and cash equivalents. The euro is trading about 0.92 euro to the dollar. Since 2009, Rovio has been known for its "Angry Birds" game, and has since grown the initial game into a franchise.
"We firmly believe the combination of Rovio’s renowned IP and scale of its user base, together with our best-in-class monetization and game operations capabilities, will create tremendous value for our shareholders," said Robert Antokol, Playtika chief executive, in a statement.
Read: Applovin, Unity Software get downgrade as analyst sees mobile game crunch into 2024
Analysts surveyed by FactSet expect Rovio to report 2022 sales of $319.6 million euro, up from the previous year’s $286.2 million
Recently, Goldman Sachs analyst Eric Sheridan, who has a neutral rating and a $15 price target on Playtika, noted the company’s mobile game revenue declined to the negative single-digit percent year-over-year over the holiday period, "but with meaningful variance across the portfolio (as several games are seeing much better/worse trends)."
Analysts surveyed by FactSet expected Playtika to report fourth-quarter earnings of 17 cents a share on revenue of $627.4 million, down from last year’s 25 cents a share on revenue of $649 million.
Cowen analyst Doug Creutz, who has an outperform rating and a $29 price target on the stock, believes the deal could revitalize the "Angry Birds" franchise because Playtika is more experienced in the monetization of mobile games.
While "Angry Birds" was one of the first blockbuster mobile titles, it offered a free version with ads or an ad-free version for $1, not the most ideal way of making money off the IP, Creutz said.
"The company never really mastered the [free to play]/live service model of mobile monetization and as a result, was surpassed by its competitors despite the global popularity of the IP," Creutz said. "Given their history of successfully growing acquired titles, we believe Playtika can help bring Angry Birds into the modern era of game monetization and create value."
The mobile gaming and monetization sector has become active lately with AppLovin Corp. (APP)giving up its quest to merge with Unity Software Inc. (U). Recently, one analyst downgraded Applovin and Unity because he expected headwinds in the mobile game space to last for another two years
Both Palo Alto, Calif.-based Applovin and San Francisco-based Unity offer marketing, monetization and analytics software that helps app developers grow their businesses. But while Applovin has an apps business that it is treating as a standalone concern and may sell, Unity produces videogame-engine software that competes with Epic Games Inc.’s Unreal Engine.
A year ago, the M&A frenzy for videogame publishers was in full swing after Take-Two Interactive Inc. (TTWO) offered to buy Zynga for $12.7 billion, which was quickly followed up by Microsoft’s surprise $69 billion offer for Activision Blizzard Inc. (ATVI), then Sony’s (6758.TO)$3.6 billion offer to acquire publisher of the "Destiny" franchise Bungie
Read: Cloud software is a ‘fight for a knife in the mud,’ and Wall Street is souring on the one sector that was winning
Even Playtika climbed on the bandwagon last year with an announcement its board was considering a possible sale of the company Playtika is no stranger to M&A having last acquired a growing majority stake in design app company Reworks in a deal valued up to $600 million back in August 2021.
-Wallace Witkowski
(END) Dow Jones Newswires
01-19-23 1519ET
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.
© Copyright 2023 Morningstar, Inc. All rights reserved. Dow Jones Industrial Average, S&P 500, Nasdaq, and Morningstar Index (Market Barometer) quotes are real-time.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.


Apk Bazar

Leave a Reply

Your email address will not be published. Required fields are marked *