People playing video games
Keywords Studios receives lower potential offer / Image source: Adobe
  • EQT lowers offer on softer trading
  • New offer deadline 3 July 2024
  • Strong full year expected

A rational person changes their mind when the facts change and that appears to be the case in the ongoing negotiations for a takeover of Keywords Studios (KWS:AIM) by Swedish private equity firm EQT.

Having completed due diligence which revealed some short-term headwinds for the business, EQT revised down its possible cash offer from £25.50 to £24.30 on 27 June, upping it slightly to £24.50 today (28 June), the final day of the PUSU (put up or shut up) period.

The revised potential offer represents a 4% reduction on the 23 May offer of £25.50 per share. Keywords has requested a short extension to the PUSU deadline to the close of play on 3 July 2024. The shares gained 6% to £23.06 reflecting greater certainty a concrete offer will be made.


Keywords said it remains confident in delivering strong overall revenue and profit growth in 2024 with a second half weighting as the gaming industry recover from slower content creation trends.

In addition, the company has seen a small number of larger game projects being delayed or cancelled creating capacity gaps, together with a slow ramp-up of content production in Hollywood following last year’s strikes.

Consequently, first half organic revenue growth is expected to be slightly negative followed by a second half recovery back to 10% organic growth, in line with medium term guidance.


Russ Mould, investment director at AJ Bell, commented: ‘It was clear from prolonged negotiations that EQT’s £25.50 per share proposal in May to buy gaming services group Keywords Studios had subsequently hit a stumbling block behind closed doors.

‘The deadline to make a formal offer had to be extended, and now it’s been revealed that EQT has been talking down the price seemingly because Keywords has suffered a few negative trading issues.

‘The market appears to have been worried about the takeover’s chances from the get-go because the share price continuously traded well below the initial £25.50 proposal. We still don’t have a firm offer, but the fact the board is minded to recommend the new lower price sends a signal to shareholders that this might be the best offer they get.’

Disclaimer: Financial services company AJ Bell referenced in the article owns Shares magazine. The author of the article (Martin Gamble) and the editor (James Crux) own shares in AJ Bell.


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Issue Date: 28 Jun 2024