Sweden’s MTG AB surged after its portfolio company ESL, the world’s largest esports company, said it is partnering with Tencent Holdings Ltd.-backed streaming platform Huya Inc. to expand in the Chinese market for competitive gaming.
ESL’s majority owner MTG AB has entered into a binding term sheet with Huya, and plans to form a joint venture with the Chinese company. Huya will also buy $30 million worth of shares in the company, in a deal that will see ESL issue new $22 million in new shares and that gives the German company a pre-money enterprise value of $425 million.
Shares in MTG gained as much as 25%, the most on record. They were trading at 93.8 kronor as of 9:35 a.m. in Stockholm, giving the Stockholm-based company a market value of $646 million.
MTG earlier this year spun off its TV business to focus entirely on gaming and esports, the latter of which has grown rapidly in recent years but has yet to turn a profit. Expanding viewership is an important factor in making the business profitable by boosting sponsorship deals, increasing advertising revenue and selling media rights. In the first six months of this year, the business posted a 174 million-krona ($17.7 million) operating loss.
Categorized in: Esports News