King Digital, the British creator of Candy Crush, has been bought for $5.9bn (£3.8bn) in the biggest takeover of a UK tech company in four years.
King is being acquired by US video game maker Activision Blizzard, owner of World of Warcraft and Call of Duty. The US group will pay $18 in cash for each King share – 16% more than King’s closing price on Monday – in a deal that is the biggest in the British tech sector since Hewlett Packard bought Autonomy in an ill-fated £7bn deal in August 2011.
Activision Blizzard’s games are played on consoles – Microsoft’s Xbox and Sony’s PlayStation – and it said buying King would give it a place in the rapidly growing mobile games market.
King floated on the New York Stock Exchange in March last year with a valuation of almost $8bn, making it the most valuable British business of the tech craze. Candy Crush became wildly popular, racking up a billion plays a day on smartphones for the company, based in London’s West End.
The confectionery-themed game, in which players must make lines of sweets disappear from a grid by lining up three or more of the same colour, was no longer a top 10 download at the time of flotation. The game still makes up about a third of King’s revenues.
King’s shares fell on their first day of trading as traders decided it was a one-product company, even though the business has 200 games. The shares have never got back to the $22.50 they were sold for and the sale to Activision Blizzard means those who bought at the time of flotation have made a loss.
The flotation made multimillionaires of the company’s leadership team, including its then chairman Melvyn Morris. The British entrepreneur used his fortune to become the sole owner of his local football club, Derby County, in September.
At the time of the flotation Morris’s stake had a paper value of about $875m. He will now have most of that sum in cash.
King’s chief executive, Riccardo Zacconi, and his team will run King as a separate business within Activision Blizzard. He said: “We will combine our expertise in mobile and free-to-play with Activision Blizzard’s world-class brands and proven track record of building and sustaining the most successful franchises, to bring the best games in the world to millions of players worldwide.”
This article was written by Sean Farrell, for theguardian.com on Tuesday 3rd November 2015 08.37 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010