Keywords Studios sees premium takeover offer, shares soar

Keywords Studios (LSE:KWS), a Dublin-headquartered and London-listed service provider to the video games industry, saw its shares soar more than 60% on Monday after it was approached over a potential premium-priced takeover offer.

The bidder EQT Group is offering shareholders £22.50 per share plus the promise of an extra final dividend payment.

Multiple proposals have been made by EQT, Keywords said. It added that this is the latest approach and it ‘might be recommended’ by the board - if a formal offer comes before a 15 June deadline.

The company – which provides art, sound, language and customer support services to the likes of Activision Blizzard, Nintendo, and Tencent – would be valued at 12-times its underlying earnings by the EQT proposal.

That would be a long way lower than previous video game takeovers in London, as both Sumo Group (bought by Tencent) and Codemasters (bought by Electronic Arts) were valued at 31-times earnings when they were acquired in 2021.

In London, Keywords stock was up 866p or 58% into Monday’s close of trading, at 2,334p per share.