Shearman & Sterling advised Leyou Technologies Holdings Limited (Leyou) in connection with its take private by Image Frame Investment (HK) Limited, a wholly owned subsidiary of Tencent Holdings Limited, by way of a scheme of arrangement under Section 86 of the Companies Law of the Cayman Islands (the Scheme) which became effective on December 21, 2020 (Cayman Islands time). Under the Scheme, all the shares in Leyou listed on the Hong Kong Stock Exchange were cancelled in exchange for HK$3.3219 per share for a total consideration (including the option offer) of approximately HK$11.6 billion ($1.5 billion).
Throughout this complex and challenging process, Shearman & Sterling closely worked with Leyou to explore different transaction structures with different potential buyers and multiple final round bidders, including iDreamSky Technology Holdings Limited (HKSE: 1119) and finally with Tencent, both of which are leading market players in the gaming industry. As the businesses of Leyou span across many major markets including North America, the United Kingdom and continental Europe, the closing was subject to complex regulatory filings and approvals as well as many important licensors’ consent. Given the United States government’s recent policy trends, further considerations from sensitive personal data, national security and political perspectives had to be taken into account.
Leyou is a leading gaming company with a global reach which has developed and operated many award-winning games including Warframe, one of the most popular games in the world. Leyou has also secured a multitude of prestigious intellectual property rights (including those of the Lord of the Rings, Transformers and Civilization) and development relationships with key industry players, including Microsoft and Google, making it one of the more attractive acquisition targets in the gaming and entertainment industry.
The Shearman & Sterling team was led by partners Li Chen (Hong Kong/Beijing-Mergers & Acquisitions) and Max Hua (Hong Kong-Capital Markets); associates Patrick Liu, Coco Liu (both Hong Kong-Mergers Acquisitions), Weina Guan (Beijing-Mergers & Acquisitions), Carmen Yuen and Julie Qi (both Hong Kong-Capital Markets); and legal assistant Jennifer Hou (Hong Kong-Capital Markets). Other lawyers involved in the transaction include partners Jordan Altman (New York-Intellectual Property Transactions), Emma Maconick (Menlo Park-Intellectual Property Transactions), Larry Crouch (Menlo Park-Tax), John Beahn (Washington D.C.-CFIUS), Brian Burke (New York-Litigation) and John Cannon (New York-Compensation, Governance & ERISA); counsels Robert LaRussa (Washington D.C.-CFIUS), Jonathan Cheng (New York-Antitrust) and Mathias Stöcker (Frankfurt-Antitrust); and associates Sophie Zander (New York-Intellectual Property Transactions), Marc Elzweig (Menlo Park-Intellectual Property Transactions), Austin Jones (Menlo Park-Tax) and Jieni Ji (Shanghai-Litigation).
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NOTES TO EDITORS:
About Shearman & Sterling:
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