June 29, 2022

Hong Kong based listed gaming hardware maker Razer Inc. in a consortium led by its top executives in a deal to take the company back to private has valued it at up to HK$35 billion ($4.5 billion).

According to reports, company Chairman Min-Liang Tan and its non-executive director Kaling Lim, having a combined stake of nearly 60%, are leading the consortium to offer up to HK$4 per share for the deal. The amount is almost double the company’s average share price of HK$2.1 over the past month.

The move by Razer comes as the group believes it has been undervalued in Hong Kong share market where investors typically lean more towards tech firms from mainland China.

The company’s market shares rose as much as 23% in afternoon trading on Tuesday after the news report to go private. At 0521 GMT, it was up more than 10%.

During a company filing, earlier in late October, Tan and Lim had mentioned to be in preliminary talks with financial investors to explore the possibility of a transaction that involves it to lead a general offer for its shares.

The consortium is also reportedly under talks with private equity firm CVC Capital Partners for the possible upcoming buyout.

According to reports, buyout firm KKR is also found to have studied the deal but has yet to decide on whether it will invest. While the talks have advanced and the group is looking positively to announce the deal by the end of this year.

About Razer

The company was founded in the United States and Singapore in 2005. It is known for making wireless mice to manufacturing gaming keyboards, gaming laptops, and other accessories.

In the first half of 2021, the company recorded a net profit of $31.3 million, from a net loss of $17.7 million a year earlier, over gaming boom, as COVID-19-related lockdowns kept people at home. While the United States branch recorded 42% profit of its first-half revenue.

The company opened to public at HK$3.88 per share in the Asian financial hub in 2017.

Since the October filing on Tan and Lim’s talks with investors, the shares rose 30% to five-month highs.