Angry Birds maker Rovio has entered preliminary sale negotiations with a number of potential suitors, the studio announced Monday. The news of this development arrives weeks after Israeli gambling giant Playtika offered to buy Rovio in an all-cash deal valued at over $800 million.
Founded in 2003, Rovio went on to develop and publish dozens of J2ME games before establishing itself as a mobile gaming powerhouse at the dawn of the smartphone era with the planetary success of its Angry Birds franchise. The massively popular series of physics-based games propelled Rovio to a historic initial public offering valued at $1 billion back in 2017. And although the company's valuation never reached its IPO heights, its consistent releases and non-gaming projects like the record-breaking The Angry Birds Movie managed to keep it relevant in the entertainment space to this date.
Following Playtika's January offer to acquire Rovio at the equivalent of $9.79 per share, the Finnish studio has now officially started non-binding discussions over a potential sale, according to its latest note to investors. Rovio says Playtika isn't the only party interested in taking over its operations, although it has yet to name any other suitors. Since no other bids for Rovio have been made public in recent times, it's plausible that Playtika's competition for acquiring the Finnish developer exclusively consists of privately held entities, as public companies generally have to be more transparent with their merger and acquisition activities.
Looking at the immediate future, the sole fact that Rovio is currently considering a sale doesn't guarantee that any such deal will materialize. Not least because its decision to kickstart official negotiations with Playtika and other suitors is primarily rooted in its fiduciary duty to maximize shareholder value. Either way, the Israeli developer currently seems to be leading the race to acquire the Angry Birds maker, as the 55% premium it offered in January is still cited as the baseline sale price in Rovio's latest investor note.
Playtika's January bid described Rovio's game portfolio as under-monetized, with the Tel Aviv-based company positing that combining the two businesses would unlock tremendous value. What it didn't say is what a potential sale would mean for Rovio's non-gaming projects, such as the still-ongoing Angry Birds animated series.
Another thing that remains to be seen is whether the Finnish company manages to invite a bidding war over its properties. But either way, between Rovio's latest announcement and Microsoft's continued attempts to complete its Activision Blizzard acquisition, 2023 is shaping up to be a big year for game industry consolidations.
Source: Rovio Investors
