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(Correcting Keywords Studios PLC valuation implied by the EQT Group proposal.)
Keywords Studios PLC on Friday said it would be ‘minded to accept’ a takeover proposal from private equity firm EQT Group, should a firm offer be made.
The proposal values the Dublin-based provider of technical and creative services for video game production at £2.1 billion on a fully-diluted basis. The proposal prices each Keywords share at 2,450p. It followed a revised cash offer of 2,430p made on Wednesday.
Keywords in May, however, had said it received a cash bid of 2,550p per share from EQT.
Keywords shares rose 5.8% to 2,304.00 pence each on Friday afternoon in London, giving it a market capitalisation of £1.84 billion.
On current trading, Keywords said: ‘The board is confident in delivering strong overall revenue and profit growth in 2024, with performance expected to be second half weighted as the sector emerges from the slower content creation trends that are currently dampening industry spend and therefore group growth.’
It said a ‘small number of larger game development projects’ have been deferred or cancelled.
Keywords added: ‘This, together with ongoing softer demand in Globalize and the relatively slow ramp-up in content production in Hollywood, has meant that first half organic growth is now expected to be slightly negative during H1. Reported revenue is still expected to grow by around 7% in the first half.’
Keywords added it is seeing ‘positive signs’ in the industry, as larger clients are upping spending. It predicts second half organic growth of around 10%, in line with its medium-term guidance.
The company said it continues to closely manage costs, while it expects adjusted operating margins in the first half to be lower. It adds that second half margins will be ‘strong’ as the impact of the cost savings programme is set to come through.
Finally, Keywords announced it has decided to change its presentational currency to the US dollar from the euro starting from January 1 this year to reflect the currencies in which the company operates. It added that the results for the half-year ending on Sunday will be presented in dollars.
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