Bain, KKR among bidders for Hong Kong gaming firm Leyou: sources

[HONG KONG] Bain Capital, CVC Capital Partners and KKR & Co are among bidders for Hong Kong-based game developer Leyou Technologies Holdings Ltd, according to people familiar with the matter.

The buyout firms are selected to participate in the second round of bids, the people said, asking not to be identified because the matter is private. The firms are discussing potential financing options with investment banks, the people said. Leyou also attracted interests from other gaming companies, they said.

Leyou said in September that it was holding preliminary talks with potential investors on possible transactions, which may lead to a public takeover. It hired Moelis & Co as financial adviser. Shares of Leyou have risen about 2 per cent since the announcement on Sept 20, giving it a market value of about HK$7.8 billion (S$1.35 billion).

Leyou was listed in Hong Kong in 2011 with products including free shooting games Warframe and Dirty Bomb. It's also working with Amazon.com Inc to co-produce a video game based on the popular fantasy series The Lord of the Rings. Other upcoming games are Civilization online and Transformers.

Considerations are still ongoing, no final decision has been made and the companies could still decide against pursuing a transaction, the people said. Representatives for Bain, CVC and KKR declined to comment, while a representative for Leyou didn't immediately respond to requests for comment.

In the latest update on Oct 16, Leyou said it has received a number of indications of interest from potential investors for the company or a substantial part of its business. These potential investors are conducting due diligence and there's no agreement made for any transaction, it said.

BLOOMBERG