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Sega to buy mobile games maker Rovio

Video game company Sega said it will purchase Rovio, the company behind the 'Angry Birds' franchise of mobile games. #pressrelease

April 17, 2023

6 Min Read

Sega Europe Limited ("Sega Europe" or the "Offeror"), a private limited company incorporated and existing under the laws of England and Wales, that is directly and wholly owned by Sega Corporation ("Sega Corporation"), a corporation incorporated and existing under the laws of Japan, that, in turn, is directly and wholly owned by Sega Sammy Holdings Inc. ("SSHD"), a corporation incorporated and existing under the laws of Japan, with its shares listed on the Tokyo Stock Exchange, hereby announces a voluntary recommended cash offer to the shareholders of Rovio Entertainment Corporation ("Rovio" or the "Company") to tender all their shares in Rovio to Sega Europe for a cash consideration of EUR 9.25 per share as well as an offer to the option holders under the Company's Stock Options 2022A plan to tender all their options for a cash consideration of EUR 1.48 per option (the "Offer"). The total value of the Offer, based on all 76,179,063 issued and outstanding shares in Rovio (the "Shares") and all 742,300 issued and outstanding options under the Company's Stock Options 2022A plan (the "Options"), amounts in aggregate to approximately EUR 706 million. The Shares in Rovio are admitted to trading on the official list of Nasdaq Helsinki Ltd ("Nasdaq Helsinki"). Shareholders in Rovio who in aggregate hold Shares corresponding to approximately 49.1 percent of the outstanding Shares and votes in Rovio, have irrevocably undertaken to accept the Offer, subject to certain customary conditions.

The Board of Directors of Rovio, represented by a quorum comprising all members of the Board of Directors, has unanimously agreed to recommend that the shareholders and the option holders of Rovio accept the Offer.

KEY HIGHLIGHTS AND SUMMARY OF THE OFFER

  1. On April 17, 2023, SSHD and Rovio entered into a combination agreement (the "Combination Agreement") pursuant to which the Offeror makes the Offer for all Shares and Options in Rovio.

  2. The shareholders of Rovio are offered EUR 9.25 in cash for each validly tendered Share (the "Share Offer Price") and the option holders of Rovio are offered EUR 1.48 in cash for each validly tendered Option (the "Option Offer Price"), each respectively subject to any adjustments as set out in the section "The Offer in Brief" below.

  3. The Share Offer Price represents a premium of:

    1. approximately 63.1 percent compared to the closing price of EUR 5.67 for Rovio's Share on Nasdaq Helsinki on January 19, 2023, i.e. the last day of trading prior to the announcement by a certain third party regarding its non-binding indicative proposal to acquire all issued and outstanding shares of Rovio;

    2. approximately 55.2 percent compared to the volume-weighted average trading price of EUR 5.96 for Rovio's Share on Nasdaq Helsinki during the last three-months before January 19, 2023;

    3. approximately 19.0 percent compared to the closing price of EUR 7.78 for Rovio's Share on Nasdaq Helsinki on April 14, 2023, being the last day of trading before the announcement of the Offer; and

    4. approximately 17.5 percent compared to the volume-weighted average trading price of EUR 7.87 for Rovio's Share on Nasdaq Helsinki during the last three-months before the announcement of the Offer.

  4. Moor Holding AB, Brilliant Problems Oy, Adventurous Ideas Oy, Oy Impera Ab, Niklas Hed, Mert Can Kurum, Ilmarinen Mutual Pension Insurance Company and Veritas Pension Insurance Company Ltd., who in aggregate hold approximately 49.1 percent of the outstanding Shares and votes in Rovio, have irrevocably undertaken to accept the Offer, subject to certain customary conditions, as set out in more detail under "Support by major shareholders of Rovio".

  5. The Offeror has secured the required financing to finance the Offer at completion in accordance with its terms, and subsequent compulsory redemption proceedings, if any, in accordance with the Finnish Companies Act (624/2006, as amended, the "Finnish Companies Act"). The Offeror's obligation to complete the Offer is not conditional upon availability of financing.

  6. The Offeror expects to publish a tender offer document (the "Offer Document") with detailed information on the Offer on or about May 5, 2023. The offer period under the Offer is expected to commence on or about May 8, 2023, and to expire on or about July 3, 2023, unless the Offeror extends the offer period in order to satisfy the conditions to completion of the Offer. The Offer is currently expected to be completed during the third quarter of 2023.

  7. The completion of the Offer is subject to the satisfaction or waiver by the Offeror of certain customary conditions on or prior to the Offeror's announcement of the final results of the Offer, including, among others, that approvals by all necessary regulatory authorities have been received and the Offeror having achieved acceptances in respect of more than 90 percent of the Shares and votes in Rovio on a fully diluted basis.

Commenting on the Offer, Alexandre Pelletier-Normand, CEO of Rovio:

"I grew up playing Sonic the Hedgehog, captivated by its state-of-the-art design. Later, when I played Angry Birds for the first time, I knew that gaming had evolved into a true mainstream phenomenon, with the power to shape modern culture.

Joining Rovio has been an honour and I am proud to have seen Angry Birds continue to grow, as we released new games, series and films. Less known but equally impressive is our industry-leading proprietary technology platform, Beacon, holding 20 years of expertise, allowing tight-knit teams to develop world-class GaaS products.

Our mission is to 'Craft Joy' and we are thrilled at the idea of using our expertise and tools to bring even more joy to our players, enhancing and expanding Rovio's and Sega's vibrant IPs.

Red and Sonic: two globally recognized and iconic characters made by two remarkably complementary companies, with a worldwide reach that spans mobile, PC/console, and beyond. Combining the strengths of Rovio and Sega presents an incredibly exciting future."

Commenting on the Offer, Haruki Satomi, President and Group CEO, Representative Director of Sega Sammy Holdings Inc.:

"Among the rapidly growing global gaming market, the mobile gaming market has especially high potential, and it has been Sega's long-term goal to accelerate its expansion in this field. I feel blessed to be able to announce such a transaction with Rovio, a company that owns "Angry Birds", which is loved across the world, and home to many skilled employees that support the company's industry leading mobile game development and operating capabilities. Historically, as represented by the "Sonic the Hedgehog" series, Sega has released countless video game titles to various gaming platforms. I am confident that, through combination of both companies' brands, characters, fanbase, as well as corporate culture and functionality, there will be significant synergies created going forward."

Read the press release here.

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