Private equity firm Joffre Capital will pay over $2.2 billion to acquire a minority stake in Israeli gaming firm Playtika Holding Corp from a holding company controlled by Chinese video gaming mogul Yuzhu Shi, according to a regulatory filing on Tuesday.
Joffre, a tech-focused buyout firm led by former Baidu executive James Lu, will pay Playtika Holding UK II Limited (PHUK II) $21 per share for 106.1 million shares, or 25.73% of Playtika’s outstanding shares, according to the filing. The price represents a premium of about 46% to Monday closing price.
Playtika’s shares fell 6% to $13.5 at midday.
In February, Playtika said it would explore strategic alternatives to maximize value for stockholders. A month earlier, PHUK II, its largest shareholder with a stake of about 52%, said it was contemplating selling 15%-25% of Playtika’s outstanding shares.
The deal will likely result in Playtika concluding its strategic review and remaining a public company, according to sources familiar with the matter.
Shi, chairman of Giant Network Group, controls PHUK II via the Chinese online game developer and another entity Giant Investment Co. The deal reduces PHUK II’s stake in Playtika by half to 25.73%. Joffre will nominate two board members recommended by the Chinese investment group led by Shi.
Founded in 2010, Playtika has been known for its casino-themed games and operates apps for poker and solitaire. The Israel-based company has more than 34 million monthly active users and its popular games include Bingo Blitz and Slotomania, according to its website.
Playtika went public on the Nasdaq in January last year above its target range of $27 per share, notching a record high of $36 on the debut. The stock has since fallen 60%.
In 2016, a group of Chinese investors including Shi’s Giant Network and Yunfeng Capital, a private equity firm founded by Chinese billionaire Jack Ma, acquired Playtika from Caesars Interactive for $4.4 billion. (Reporting by Julie Zhu in Hong Kong, Yuvraj Malik in Bengaluru, and Krystal Hu in New York; Editing by Krishna Chandra Eluri and Richard Chang)