Tencent Holdings Ltd. is in talks to acquire Hong Kong-listed Leyou Technologies Holdings Ltd., people familiar with the matter said, joining potential suitors including Sony Corp. in a battle for the Chinese gaming firm.
An announcement on the discussions could come as soon as Friday, said the people, who asked not to be identified as the information is private. Trading in Leyou, which has a market value of about $1.1 billion, was suspended pending a takeover code announcement.
Leyou’s controlling shareholder Charles Yuk had been in talks with Tencent-backed iDreamSky Technology Holdings Ltd. for a majority stake sale since late last year. In May, Leyou confirmed it received another non-binding offer from Zhejiang Century Huatong Group Co., a Shenzhen-listed gaming firm that also counts Tencent as a shareholder.
Tencent’s offer comes amid an escalating bidding war for Leyou, as Sony is also weighing a bid, Bloomberg News reported earlier this month.
The Chinese tech giant is still deliberating on the structure of the offer, which could involve iDreamSky and Century Huatong, one of the people said.
Talks between Leyou and Tencent are ongoing and could fall apart, the people said. A representative for Leyou declined to comment, while a representative for Tencent had no immediate comment.