Chinese gaming giant and tech conglomerate Tencent plans to take the domestically second-largest videogame streaming site Douyu private by 2022 end, a Reuter report says. Tencent currently holds 37% stake of the Nasdaq-listed steaming company, which went public in July 2019.
According to the report, Tencent wants to team up with at least one private equity firm for the deal and is currently talking to investment banks.
A screenshot of game streaming website, Douyu
The plan was “amid disagreements over strategy among executives” at Douyu, according to Reuters, citing two people familiar with the matter. Tencent and Douyu have declined to comment on the report.
Previously, there have been differences at Douyu on whether it’s to stick with game livestreaming as its core business or shift towards more profitable entertainment livestreaming, according to the sources in the report.
By this take-private deal, Tencent aims to further build its presence on Chinese gaming market as it faces increasingly intense competition from ByteDance and a series of national regulatory policies in China’s gaming sector, including the curb on minors’ gaming time.
This also comes after Chinese top market regulator blocked Tencent’s plan to merge Douyu and its rival Huya over antitrust concerns in July last year.
Last month, DouYu co-founder and co-CEO Zhang Wenming, who had favored diversifying revenue streams, resigned. But the internal tension has not been eased, the sources told Reuters. Co-founder Chen Shaojie is now in charge of the company.
After the privatization report, the stock price of DouYu on Nasdaq has increased by over 10% during intraday trading Thursday.
Tencent and Douyu did not openly comment on the issue, but some “close insider” denied the rumor when interviewed by tech media 36Kr.