I can’t fall in love for four years!
8 months after announcing the termination of the acquisition of Playtika, Giant Network took another approach to try to install it into a listed company. On July 2, Giant Network issued an announcement stating that its subsidiary Jukun Network completed the acquisition of 100% of the equity of Chongqing Cibi Business Information Consulting Co., Ltd. (hereinafter referred to as Chongqing Cibi) through capital increase, and Chongqing Cibi holds 42.04% of Alpha's shares, and Alpha's core operating assets are Playtika.
Later, Giant Network received a letter of concern from the management department of the SME Board Company, asking the company to explain whether the target of Jukun Network's acquisition was suspected of gambling, and supplement the transaction amount, source of funds, and the financial impact on the listed company of this acquisition.
Playtika is an Israeli game company. Giant Network Shi Yuzhu led the establishment of a consortium to acquire it in 2016. Then Shi Yuzhu hoped to install Playtika into a listed company. However, Giant Network has adjusted the acquisition plan many times but has not passed the approval of the China Securities Regulatory Commission. In November last year, the board of directors of Giant Network decided to temporarily terminate the acquisition of Playtika and said that Playtika plans to seek its first overseas listing.
However, Playtika still has no definite listing plan. On the contrary, Giant Network and its affiliated Giant Investment have completed part of Playtika's holdings through capital increase. Behind such a tortuous maneuver is that Shi Yuzhu and Giant Network are still eager to install Playtika into listed companies.
Acquisition of Playtika has twists and turns
Giant Network is completed in a curve?
Giant Network acquisition of Playtika can be talked about as early as 2016. In 2016, Giant Network successfully returned to the A-share market through the backdoor of Century Cruise. In August of that year, a consortium led by Shi Yuzhu acquired the mobile casual social gaming business of American gambling giant Caesar Entertainment , namely Playtika for US$4.4 billion in cash. In addition to Giant Network and Shi Yuzhu, the consortium's supporters include Jack Ma , Lu Zhiqiang , etc.
On November 15, 2016, Giant Network Shell Century Cruise released a draft of restructuring, intending to acquire all Class A common shares of Alpha from the consortium for 30.504 billion yuan by issuing shares and paying cash. After the transaction is completed, Century Cruise will hold a total of 100% of Alpha's equity.
However, the plan to put Playtika into a listed company has not been completed for three years: first, because a transaction object proposed to terminate the original "Asset Purchase Agreement" and withdraw the application documents for this major asset restructuring, and secondly, because the appraisal agency was investigated, the CSRC once suspended the review of the application documents for the major asset restructuring of Giant Network .
In order to obtain approval from the China Securities Regulatory Commission, Giant Network has also adjusted the plan to acquire Playtika many times. In July last year, Giant Network made major adjustments to the acquisition plan, announcing that Playtika's acquisition has changed from 100% to only 42.30%, and the payment method of the transaction has changed from the issuance of shares to cash.
But this solution is still not implemented. One of the important reasons is that Giant Network requires a lot of cash to be paid. The adjusted draft plans to acquire shares of Playtika's parent company Alpha from six institutions including Panhai Investment and Hony Investment. The funds are owned by listed companies and self-raised funds, while more than 5 billion yuan of cash on Giant Network account are far from this goal. Finally, in November last year, Giant Network announced that it had terminated the acquisition plan due to Playtika's plan to go overseas.
When communicating with multiple securities firms on May 6 this year, Giant Network still stated that in view of Playtika's plan to seek overseas capital operations, in order to avoid triggering relevant restrictive regulations, the company decided to terminate the planning of related restructuring matters in November 2019. "The company will continue to negotiate friendly with relevant parties to seek more suitable capital operation methods."
This time, Jukun Network completed a 100% stake in Chongqing Cibi through capital increase, which is equivalent to Giant Network indirectly owning 42.04% of the equity of Alpha. Currently, Chongqing Cibi is held by Giant Investment and Jukun Network, respectively, and the two hold approximately 53% and 47% of the shares respectively. Jukun Network is a subsidiary of Giant Network and Giant Investment with a total shareholding of more than 99%.Although Jukun Network is not the absolute holding company of Giant Network , Giant Investment is an affiliate of Giant Network .
Before Jukun Network achieved a 100% stake in Chongqing Cibi, Giant Network increased its capital in Jukun Network twice in September 2019 and January this year, of which Giant Network increased its capital by 1.128 billion yuan and 229 million yuan respectively, while Giant Investment increased its capital by 1.372 billion yuan in September last year. The letter of concern mentioned that Giant Network did not disclose the specific purpose of the capital increase during the two capital increase, and asked it to explain whether the previous disclosure was true, accurate and complete.
In addition, whether Playtika is suspected of gambling is another focus of the letter of concern. As early as the plan of Giant Network to acquire Playtika, the CSRC has paid attention to whether Playtika’s game products have lotto factors. Giant Network has always described Playtika as an Israeli artificial intelligence company, and emphasized that its business will not operate in China at present and in the future, and will not violate the policy regulations of industry authorities such as the Ministry of Propaganda, the Ministry of Industry and Information Technology, and the Ministry of Culture and Tourism of .
Giant Network performed poorly last year. If the merger is made after the acquisition, the performance will be increased
Shi Yuzhu is persistent in putting Playtika into a listed company?
Last year was the third year of Giant Network 's backdoor acquisition. Although it fulfilled its performance commitment, due to the game version number and divestiture of Internet finance business, Giant Network 's performance last year was poor. The company achieved operating income of 2.571 billion yuan, a year-on-year decrease of about 32%, and the net profit attributable to shareholders of listed companies was 820 million yuan, a year-on-year decrease of 23.94%.
. By acquiring Playtika, the performance of Giant Network can be thickened in a short period of time. Previously, the acquisition plan of Giant Network disclosed that Playtika achieved net profits of 1.65 billion, 2 billion and 1.2 billion in 2016, 2017 and the first half of 2018 respectively. At the same time, Giant Network also made a performance commitment of 10.3 billion yuan in four years.
Shi Yuzhu gave way to the young people and promoted the construction of the middle platform
After the acquisition of Playtika, Giant Network returned the focus of its business to its self-developed online game business. The company decided to strengthen the construction of the middle platform and realize the "big, middle platform and small projects" model. At the beginning of this year, Giant Network announced the company's development plan for the next three years, saying that the company will make layouts from five aspects: focusing on high-quality products, middle-end construction, strengthening overseas travel, partner mechanisms and cloud games.
At the live broadcast ceremony of the 15th anniversary of the founding of Zhengtu IP, Shi Yuzhu said that the company has handed over the business decision-making power to partners composed of young backbones, so that those who know the situation best can make the decision.
"It has been 15 years since the journey. During the discussion with my partners, I said three points: we cannot be kidnapped by performance appraisal and squeezed players; if we want to live long, we must treat players well and respect players; let senior players participate in R&D decisions, and avoid working behind closed doors." Shi Yuzhu said.
Since this year, Giant Network has obtained three game version numbers, including key games such as "The Journey of the King" and "Ball Battle 2". Since the game version restarted in 2018, 15 games have obtained version numbers for Giant Network . At the performance briefing in May this year, Giant Network , director and general manager of Liu Wei, told reporters that the games that the company has obtained game version numbers and have not yet been launched include "Water Diary", "King of the Journey", "Xianxia World Mobile Game", etc. In addition, "Pascal Contract" has a Switch version development plan.
She said that the company attaches great importance to overseas markets and will focus on self-research and spontaneous development in the long run. In the near future, it will test the waters through agency issuance, run-in the team and explore the market. It is expected that products will be launched in Hong Kong, Macao and Taiwan in the third quarter. "It is a mobile game of barrage shooting."
Beijing News Shell Finance reporter Lu Yifu Editor Yue Caizhou Proofreading Jia Ning
