Tencent Said to Makes Plans to Take US-Listed Streaming Firm DouYu Private
Tencent Holdings plans to take DouYu International Holdings private amid disagreements over strategy among executives at the Chinese videogame streaming firm, two people with direct knowledge of the matter said.
Tencent, the biggest shareholder in Nasdaq-listed DouYu with a 37 percent stake, wants to team up with at least one private equity firm for the deal and is currently talking to investment banks, they said.
It is aiming to complete the deal this year, said one of the people.
Shares in DouYu, one of Tencent's main platforms for game marketing and China's No. 2 videogame streaming site, surged as much as 17.6 percent on the news, closing 14 percent higher on Thursday.
The company has been debating its business strategy after Tencent's plans to merge it with bigger rival Huya were blocked by regulators in July last year on antitrust grounds.
There have been differences among DouYu executives over whether to stick with game livestreaming as its core business or shift towards more profitable entertainment livestreaming, said the other person.
That tension has not abated even after DouYu co-founder and co-CEO Zhang Wenming, who had favoured diversifying revenue streams, resigned last month, the person added. DouYu has said Zhang's departure was due to personal reasons. Co-founder Chen Shaojie now runs the company.
The take-private plans reflect Tencent's desire to have a firm grip on its core gaming affiliates at a time when it faces a raft of regulatory issues, said the people, who were not authorised to speak on the matter and declined to be identified.
A 60 percent slide in DouYu's stock price since July, giving it a market value of $717 million (roughly Rs. 5,380 crore) on Wednesday, has also meant it is
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