Razer execs plan to value firm at up to $4.5 bln in take-private deal -sources

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  • Consortium will offer up to HK$4/shr for Razer private-source picks
  • Wants to value the company up to HK$35 billion – sources
  • The consortium is also in talks with CVC Capital to source the deal
  • Buyout firm KKR has also studied deal-sources
  • Consortium aims to eventually list Razer in New York -sources
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HONG KONG, Nov 16 (Businesshala) – A consortium led by top Razer Inc. executives is set to negotiate pricing with two people in a deal to keep the Hong Kong-listed gaming hardware maker private for up to HK$35 billion ($4.5 billion). is planning. Told to know about the matter directly.

Chairman Min-Liang Tan and non-executive director Kaling Lim are leading a group to offer HK$4 per share for the deal, with a combined stake of about 60% in Razer, the people said. That’s almost double Razer’s average share price of HK$2.1 over the past month.

The move comes as the consortium believes that Razer, based in the United States and Singapore, is undervalued in Hong Kong, where investors typically focus more on tech firms from mainland China, the people said. That said, there has been a decline in identity due to privacy constraints.

Razer declined to comment. Tan and Lim also declined to comment to a Businesshala query made through the company.

Shares of Razer were up 23% in afternoon trading on Tuesday following a Businesshala report. It was up more than 10% at 0521 GMT.

In late October, a company filing said that Tan and Lim were in preliminary talks with financial investors to explore the possibility of a transaction involving the company that may or may not be a general offering for its shares.

One of the two people with knowledge of the matter and two others said the consortium is also in talks with private equity firm CVC Capital Partners for the purchase.

Buyout firm KKR (KKRN) has also studied the deal but is yet to decide whether it will invest, said the first two people and another person.

KKR declined to comment. The CVC did not immediately respond to a request for comment.

Negotiations have gone ahead and the consortium wants to announce the deal by the end of 2021, the first two people said.

The consortium aims to eventually list Razer in New York to take advantage of the higher valuations for tech stocks, the first two people told Businesshala.

Razer Performance

Founded in the United States and Singapore in 2005, Razer has grown from making wireless mice to making gaming laptops, gaming keyboards, and other accessories.

It came in a record net profit of $31.3 million in the first half of 2021, riding a gaming boom as COVID-19-related lockdowns kept people at home, compared to a net loss of $17.7 million a year earlier . The United States accounted for 42% of its first half revenue.

Razer went public in 2017 at the Asian financial hub at HK$3.88 per share, off a stellar start driven by strong retail demand for new technology stocks.

But its stock rallied more than half last month from a peak of HK$3.36 in February, while the benchmark Hang Seng Index (.HSI) fell 24% over the same period.

However, the shares have jumped 30% and hit a five-month high since the October filing on Tan and Lim’s talks with investors.

A transaction would lead to an increase in strategic investors and buy-and-hold firms, which are tapping Hong Kong companies for private-private opportunities, attracted by undervalued shares.

Refinitiv data showed Hong Kong-listed firms have been involved in $8.15 billion in private-private deals in 2021, up from $23 billion for all of the previous year.

($1 = 7.7923 Hong Kong Dollar)

Reporting by Julie Zhu and Ken Wu; Editing by Anshuman Daga and Himani Sarkar

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