Playtika Holding (PLTK) shares turned lower Tuesday after buyout group Joffre Capital purchased a stake in the online casino gaming group valued at around $2.2 billion.
Axios had reported Monday that Joffre, a tech-focused buyout group, was looking to pay $21 a share to buy a majority stake in Israel-based Playtika from a group of Chinese investors. The purchase of 106.1 million shares at that price -- equal to a 25.7% stake -- was confirmed by Joffre and Giant Investment Co.
Playtika, which saw first quarter revenues rise 6% from last year to $677 million and expects to record adjusted full year profits of around $940 million, unveiled plans in February to "evaluate potential strategic alternatives ... which could include a sale of the company or other possible transactions."
Playtika shares, which were up more than 15% in pre-market trading, were marked 6% lower in late-morning trading to change hands at $13.49 each, move that would value the group at around $5.54 billion.
Video game companies generated around $180 billion in revenues last year, an industry report noted, a modest increase from 2020 levels lead by around $90 billion in revenues from mobile gaming options.
The sector's prospects have attracted a host of new investors, as well, with billionaire Warren Buffett building a 9.5% stake in Activision Blizzard ATVI ahead of its planned $69 billion takeover by Microsoft (MSFT) earlier this spring.
Activision, which publishes 'World of Warcraft', 'Call of Duty' and 'Candy Crush' said its $69 billion sale will close in the second quarter of next year.
"Gaming is the most dynamic and exciting category in entertainment across all platforms today and will play a key role in the development of metaverse platforms," said Microsoft CEO Satya Nadella. "We're investing deeply in world-class content, community and the cloud to usher in a new era of gaming that puts players and creators first and makes gaming safe, inclusive and accessible to all."
Earlier this year, the New York Times Company said it would purchase Worldle, the popular daily world puzzle challenge, for what it called a "low seven figures" total price.
Wordle, which was only released in October, has amassed a global following of players who attempt to solve a five-letter 'mystery word' with only six guesses. The Times said it hopes the phenomenon will add more heft to its gaming division, which passed the 1 million mark in terms of subscribers last year, as it aims to reach a target of 10 million total media subscribers by 2025.
