TikTok owner ByteDance is engaging mobile games company CMGE Technology Group Ltd (HKG: 0302) with an aim of acquiring stake in the China based games publisher. This information was revealed by insiders who claimed ByteDance want invest in CMGE as a way of diversifying its growth.
The gaming industry has been experiencing a boom during this pandemic time. Following stay at home orders across the world to curtail spread of the deadly virus, game downloads has increased significantly.
The sources further indicated that ByteDance is targeting to purchase a part or all of the 27.6% stake of CMGE held by Fairview Ridge Investment Ltd and managed by CMGE chairman Xiao Jian and vice chairman Sin Hendrick.
According to the sources, ByteDance is offering a range of HK$4 to HK$5 ($0.52 to $0.64) per share of CMGE. This range represents a share premium of between 30 to 62% going by the last closing price of the stock of HK$3.08.
According to regulatory filings, the biggest shareholders in CMGE are the company’s chairman and vice chairman holding stakes of 33.9% and 32.6% respectively. Both hold their stake through various entities.