Modern Times Group Shares Surge After Chinese E-Gaming Tie-Up
September 02 2019 - 09:20AM
Dow Jones News
By Dominic Chopping
STOCKHOLM--Shares in Modern Times Group AB (MTG-B.SK) rose as
much as 25% Monday after the Swedish e-sports and gaming company
announced a tie-up between its Turtle Entertainment e-sports
business and Chinese live streaming platform Huya Inc. (HUYA) to
facilitate expansion into China.
Modern Times Group and Tencent Holdings Ltd. (0700.HK)-backed
Huya will form a joint venture, with Huya buying a $30 million
stake in Germany-based Turtle Entertainment, known as ESL.
Modern Times Group owns 82.5% in ESL and Monday's deal gives the
whole of ESL an enterprise value of $425 million.
ESL will also issue new shares at a value of $22 million to
increase capital to be used for further expansion.
Earlier this year, Modern Times Group spun off its media and
entertainment business to focus solely on gaming and e-sports. In
its statement Monday, it said the Chinese esport market in 2019 is
expected to generate revenues of $210 million, overtaking Western
Europe as the second-largest esport region globally in terms of
revenues.
ESL and Huya said they plan to host and build local Chinese
esport competitions connected to the global ESL tournament calendar
to ensure maximum Chinese esports athlete participation on a global
scale.
"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 esport and gaming market in due time," Modern
Times Group Chief Executive Jorgen Madsen Lindemann said.
Write to Dominic Chopping at dominic.chopping@wsj.com;
@domchopping @WSJNordics
(END) Dow Jones Newswires
September 02, 2019 09:05 ET (13:05 GMT)
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