MTG soars as gets Chinese partner for e-sports firm ESL

Sep 03, 2019

STOCKHOLM, Sept 2 (Reuters) - MTG shares leapt as much as 25% on Monday after the Swedish e-sports and gaming firm said Chinese live streaming platform Huya would buy a stake in its Turtle Entertainment (ESL) business and help it expand into China.

Huya, backed by internet giant Tencent , will invest $30 million in ESL, giving the whole of ESL an enterprise value of $425 million, MTG said.

That is more than investors had priced into MTG shares, according to SEB analyst Mathias Lundberg.

MTG shares jumped to a six-week high in early trade and were up 14% to 86 crowns at 0925 GMT, valuing the company at around 5.7 billion crowns.

Huya and ESL, the largest e-sports company in the world, will also form a joint venture, while ESL will issue $22 million worth of new shares to facilitate further expansion, MTG said.

"We are excited to announce this term sheet for an important strategic partnership which provides us with a strong partner in Huya to pave the way for a successful ESL expansion into the thriving Chinese e-sports and gaming market in due time," MTG Chief Executive Jørgen Madsen Lindemann said in a statement.

The Chinese e-sports market is expected to generate revenue of $210 million this year, overtaking western Europe as the second-largest e-sports region globally, MTG said.

($1 = 9.6050 Swedish crowns)

Source: Nasdaq