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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  Tencent Holdings Limited    700   KYG875721634

TENCENT HOLDINGS LIMITED

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Chinese internet firms offer $1.23 billion for Norway's Opera Software

02/10/2016 | 07:42am EST

OSLO (Reuters) - A group of Chinese internet firms have made a cash offer for Norwegian mobile phone browser and advertising firm Opera Software (>> Opera Software ASA), valuing it at $1.23 billion, in a move to reach more of the emerging market customers with whom Opera is popular.

OSLO (Reuters) - A group of Chinese internet firms have made a cash offer for Norwegian mobile phone browser and advertising firm Opera Software (>> Opera Software ASA), valuing it at $1.23 billion, in a move to reach more of the emerging market customers with whom Opera is popular.

The buyers include U.S.-listed Web search and security firm Qihoo 360 (>> Qihoo 360 Technology Co Ltd) and Beijing Kunlun Tech (>> Beijing Kunlun Tech Co Ltd), a distributor of online and mobile games, who have agreed to pay 71 Norwegian crowns ($8.29) per share, with the total price equating to about 10 times the company's forecast core earnings.

In a statement, the buyer consortium, which also includes the Golden Brick Silk Road (Shenzhen) Equity Investment Fund and its Yonglian Investment affiliate, will result in a mobile Internet combination of Opera, Kunlun, Qihoo and Golden Brick.

Opera's acquisition is part of a complex of deals being done by the Chinese buyers seeking to join forces in their home market, which is dominated by giant rivals such as Alibaba (>> Alibaba Group Holding Ltd) and Tencent (>> Tencent Holdings Ltd). Opera also helps the group expand into emerging markets in Asia, Africa and elsewhere.

Shares in the Oslo-based firm, best known for its mobile phone web browser alternative to software from Google, Apple (>> Apple Inc.) and Microsoft (>> Microsoft Corporation), jumped 41 percent at the opening of the Oslo bourse and were up 37 percent at 67 crowns at 1200 GMT.

Opera's stock was suspended from trade on Friday after the shares rose 5 percent to 48.77 crowns in anticipation of an announcement on the company's future, management having said last year it was looking to sell itself.

Chairman Sverre Munck told Reuters on Wednesday it was essential for the 20-year-old firm to find partners in order to compete against the giants of the technology world and their integrated software platforms, which eclipse rival products.

"Facebook and (Alphabet Inc's (>> Alphabet Inc)) Google have their ecosystems and now we have one too, in a part of the world that is growing incredibly fast and where we will become very strong," he said in an interview in Oslo.

Munck said several bidders took part in the sales process but he declined to say whom.

Opera has transformed itself in recent years into a mobile advertising service, from which it now derives much of its revenue, having started out with a PC browser that has struggled to compete with mainstream Web browsers such as Internet Explorer, Chrome, Mozilla and Safari.

The Norwegian company predicted on Wednesday its underlying earnings before interest, tax, depreciation and amortisation would amount to $100-125 million in 2016 on revenue of $690-740 million.

Its browser division now specialises in compressing data to minimise download times and costs for subscribers, especially when watching video, making it particularly popular in emerging market economies where network bandwidth can be constrained.

"We want to be an ecosystem with a billion users," Opera's chief executive Lars Boilesen told Reuters, adding that the deal still needed to be approved by the Chinese authorities.

Qihoo, which provides a diverse set of search, navigation and security services to Chinese mobile phone and computer users, makes more than half of its sales from online advertising sales. Both Qihoo and Kunlun have undergone a similar evolution to Opera to focus increasingly on mobile customers.

"Kunlun and Qihoo will have access to Opera's user base to cross-sell their services too," said Jefferies financial analyst David Reynolds in a note to clients.

The acquisition of Opera comes after Qihoo agreed in December with some members of the consortium to be taken private.

Separately, Beijing Kunlun Tech last month agreed to take a 60 percent stake in popular Los Angeles-based Grindr, a gay mobile phone dating app service which is popular worldwide.

A representative for Kunlun declined to offer an immediate comment. Calls to Qihoo on Wednesday went unanswered.

(This version of the story has been refiled to add share price reaction, comments by Opera's CEO; modify syntax in paragraph six)

(Additional reporting by Eric Auchard in Frankfurt, Ole Petter Skonnord, Terje Solsvik and Camilla Knudsen in Oslo and Megha Rajagopalan in Beijing; Writing by Gwladys Fouche; Editing by Greg Mahlich)

By Joachim Dagenborg


© Reuters 2016
Stocks mentioned in the article
ChangeLast1st jan.
ACCESS CO., LTD. 1.28% 792 End-of-day quote.-17.07%
ALIBABA GROUP HOLDING LIMITED -0.15% 270.38 Delayed Quote.27.65%
ALPHABET INC. -0.75% 1722.02 Delayed Quote.29.64%
APPLE INC. -2.58% 114.26 Delayed Quote.59.84%
BAIDU, INC. -2.03% 133.295 Delayed Quote.7.68%
BASE CO., LTD. 0.17% 6000 End-of-day quote.121.95%
BASE,INC. -9.38% 8980 End-of-day quote.411.68%
BEIJING KUNLUN TECH CO., LTD. 0.67% 22.54 End-of-day quote.34.57%
BEST INC. -6.79% 2.675 Delayed Quote.-48.38%
DOW JONES AFRICA TITANS 50 INDEX -1.09% 495.5 Delayed Quote.-6.73%
FACEBOOK INC -0.49% 268.34 Delayed Quote.31.40%
LETS HOLDINGS GROUP CO., LTD. 5.34% 8.88 End-of-day quote.47.02%
MICROSOFT CORPORATION -0.51% 209.235 Delayed Quote.33.41%
S&P AFRICA 40 INDEX -1.29% 161 Delayed Quote.-5.61%
TENCENT HOLDINGS LIMITED -0.34% 586 End-of-day quote.56.02%
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Financials
Sales 2020 481 B 72 984 M 72 984 M
Net income 2020 128 B 19 396 M 19 396 M
Net cash 2020 71 088 M 10 795 M 10 795 M
P/E ratio 2020 44,4x
Yield 2020 0,23%
Capitalization 5 575 B 719 B 847 B
EV / Sales 2020 11,5x
EV / Sales 2021 9,13x
Nbr of Employees 70 756
Free-Float 60,4%
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Mean consensus BUY
Number of Analysts 50
Average target price 577,32 CNY
Last Close Price 586,00 CNY
Spread / Highest target 23,2%
Spread / Average Target -1,48%
Spread / Lowest Target -39,7%
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Managers
NameTitle
Hua Teng Ma Executive Chairman & Chief Executive Officer
Chi Ping Lau President & Executive Director
Yu Xin Ren COO & President-Interactive Entertainment Group
Shek Hon Lo Chief Financial Officer & Senior Vice President
Chen Ye Xu Chief Information Officer
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