Yahoo Finance Sumo execs to share £92m payday in Tencent takeover
The founders and directors of Sumo Group are to share a £92m payday from the sale of the video game studio to Tencent amid a continuing Chinese raid on British tech.
Directors and the three co-founders of the games developer hold around 10pc of shares in the company, a filing confirmed on Monday, meaning the executives will be handed millions of pounds as a result of the £919m takeover.
Sehnzhen-based Tencent, the world’s biggest games company and the owner of dozens of studios around the world, agreed to buy Sumo in July. The deal faces scrutiny from a US takeover regulator before it can be completed because an American division is owned by Sumo.
Advisers including bankers, lawyers and PRs will pocket fees worth £22m from the acquisition. Goldman Sachs and Zeus Capital will take away the lion’s share of around £13.7m.
Sumo’s founders - Carl Cavers, Darren Mills and Paul Porter - will collectively share around £75m, based on the transaction price. Ian Livingstone, Sumo’s chairman and one of the co-founders of Games Workshop, holds a further 1.4pc of the company’s shares.
Founded in 2003, Sumo launched as a “work-for-hire” games studio, building games for larger partners, although it has increasingly developed its own IP. Its founders led a management buyout in 2014 before listing the company in 2017.
The swoop by Tencent on Sumo, which helps develop titles including LittleBigPlanet, the Hitman series and Forza Horizon, is the latest raid by a foreign buyer on Britain’s games developers. It remains subject to regulatory clearance and comes weeks after a Chinese swoop on Newport Wafer Fab, the UK's biggest microchip factory.
The parties involve3d in the Sumo deal have referred it to the US Committee on Foreign Investment (CFIUS) because Sumo owns a games studio based in Oregon.
The US has already heavily scrutinised Tencent’s use of data and under US President Donald Trump attempted to ban the Chinese company’s messaging app WeChat, although this crackdown has eased slightly under President Joe Biden.
While video games are not typically issues of national security, Tencent’s stakes in US developers Riot Games, which makes League of Legends, and Epic Games, which owns Fortnite, have attracted regulatory scrutiny.
Tencent has said it plans to keep Sumo’s headquarters in Sheffield and invest in jobs at the company. The developer's chief executive Carl Cavers and other senior executives will also stay in their roles.
Sumo has been boosted by booming global demand for video games. The deal values its shares at 513p apiece. Sumo first went public in 2017 at around 113p a share. Sumo is due to hold a general meeting on September 10 to confirm the deal.
