HONG KONG (Businesshala) – A consortium led by top Razer Inc. executives plans to privately take the Hong Kong-listed maker of gaming hardware, valued at up to HK$35 billion ($4.5 billion), for two People directly said knowledge of the matter.
Chairman Min-Liang Tan and non-executive director Kaling Lim, with a combined stake of about 60% in Razer, lead the group offering up to HK$4 per share, two sources said, or an average of HK$2.1. The price is almost double. last month.
He said the move comes after 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, They said.
declined to identify the sources due to lack of confidentiality.
Razer declined to comment. Tan and Lim also declined to comment to a Businesshala query made through the company.
Shares of Razer were up more than 10% as of 0521 GMT on Tuesday, after dropping a 23% rise in afternoon trading following a Businesshala report.
In late October, the company said in a filing that Tan and Lim were in preliminary talks with financial investors to explore the possibility of the transaction.
One of the two sources 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.
The first two sources and another person said that buyout firm KKR has also studied the deal but is yet to decide whether to invest or not.
CVC and KKR declined to comment.
The first two sources said the talks have progressed and the consortium aims to announce the deal by the end of 2021.
He said the aim is to eventually list Razer in New York to take advantage of the higher valuations for tech stocks.
Founded in the United States and Singapore in 2005, Razer has expanded from wireless mice to manufacturing accessories other than gaming laptops and keyboards.
It came in for a record net profit of $31.3 million in the first half of 2021, riding a gaming boom as the lockdown over COVID-19 kept people at home, versus a net loss of $17.7 million a year earlier.
The United States accounted for 42% of 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 share price fell more than half last month from a peak of HK$3.36 in February, while the benchmark Hang Seng index fell 24% over the same period.
However, the shares have jumped 30% to a five-month high since the October filing on investor talks.
A deal would spark a surge in strategic investors and buyout firms, which are tapping Hong Kong companies for post-private opportunities lured 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)