China’s Bilibili in talks to buy 24% stake in games maker Yoozoo

Bilibili had 202 million average monthly active users in the fourth quarter, with 17.9 million paying users.

Chinese online video site Bilibili is in talks to buy a 24% stake and the headquarters building of Yoozoo Games as part of a deal worth nearly 5 billion yuan ($765 million), two people said, as it seeks to expand in the world’s top gaming market.

Bilibili is in talks on the deal with Xu Fenfen, chairwoman of Yoozoo, the video game company that is also known as Youzu Interactive, said the two people and another person with direct knowledge of the matter.

Last month, Bilibili and its founder Chen Rui submitted to Xu a term sheet – a non-binding agreement describing the basic terms and conditions of an investment – said the first two people.

This would be the latest acquisition for Bilibili, which is backed by Chinese technology giants Tencent Holdings and Alibaba Group Holding and started out as an animation site popular among teenagers. Last month, it raised about $2.6 billion in a secondary listing in Hong Kong.

A Bilibili spokeswoman denied it was seeking a deal with Yoozoo. Shanghai-headquartered Yoozoo, which is the developer of the popular ‘Game of Thrones: Winter Is Coming’ game, did not reply to a request for comment.

The $44 billion Chinese gaming industry received a boost last year after the COVID-19 pandemic forced many residents to stay at home, driving up game downloads and boosting the revenues of the companies.

Gaming is seen as a steady revenue source as users tend to keep playing popular titles for years and has become the main battlefield for market share, with other tech platforms, including ByteDance and Alibaba, also looking to expand.

A 24% stake in Yoozoo is worth about $475 million based on the Shenzhen-listed company’s market capitalisation of $1.98 billion on Wednesday.

In addition to the stake purchase, Bilibili and Chen are also looking to acquire Yoozoo’s headquarters building in Shanghai and take on debt of nearly 700 million yuan the company’s late founder Lin Qi left, said the two people.

That will value the overall transaction at nearly $765 million.

Bilibili, which last week invested HK$960 million ($123 million) for a 4.72% stake in online game developer X.D. Network, could team up with some Shanghai-based state investors to form a consortium for the deal, they added.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.