An­gry Birds cre­ator’s IPO falls short of soar­ing ru­mours

The Globe and Mail (Ottawa/Quebec Edition) - - GLOBE INVESTOR WEEKEND - TUOMAS FORSELL JUSSI ROSENDAHL HELSINKI

Fol­low­ing sev­eral tough years of re­cov­ery, Rovio aims to boost growth and take part in gam­ing-in­dus­try con­sol­i­da­tion

Fin­nish mo­bile games maker

Rovio En­ter­tain­ment Ltd. set a price range on Friday for its planned list­ing that would value the maker of the game An­gry

Birds at up to $1.1-bil­lion (U.S.), well be­low po­ten­tial val­ues cited in me­dia re­ports.

The com­pany, whose business is re­cov­er­ing af­ter a tough cou­ple of years, an­nounced its lon­gawaited ini­tial pub­lic of­fer­ing this month, say­ing it was aim­ing to boost growth and to take part in gam­ing-in­dus­try con­sol­i­da­tion.

Ini­tial me­dia re­ports had said the com­pany could be val­ued at up to $2-bil­lion in the flota­tion, though an­a­lysts had al­ready ques­tioned whether that could re­ally be achieved.

The pre­lim­i­nary price range of €10.25 ($14.93 Cana­dian) to €11.50 a share an­nounced on Friday would give Rovio a mar­ket value of €802-mil­lion to €896-mil­lion.

“If it had been as ru­moured, it would have been way too high,” said an­a­lyst Atte Ri­ikola from Helsinki-based eq­uity re­search firm In­deres.

“Look­ing at sales, the val­u­a­tion pits Rovio at the same level as its peers, but in­cludes profit growth ex­pec­ta­tions.”

Rovio, whose games have been down­loaded 3.7 bil­lion times, grew rapidly af­ter the orig­i­nal

An­gry Birds game was launched in 2009.

But Rovio was slow to re­spond to a shift to freely avail­able mo­bile games that make rev­enue from in-game pur­chases. Its business quickly de­clined as ri­val games such as Su­per­cell’s Clash of Clans and King’s Candy Crush Saga took over. Rovio booked an op­er­at­ing loss and cut a third of its staff in 2015. How­ever, sales are now re­cov­er­ing on the back of the 2016 re­lease of 3-D movie An­gry Birds, as well as new games.

The com­pany ex­pects to sell about 55 per cent of its shares in the flota­tion, rais­ing €438-mil­lion to €488-mil­lion.

Only €30-mil­lion would go into Rovio’s cof­fers, with most go­ing to its ma­jor own­ers, in­clud­ing Trema In­ter­na­tional and ven­ture­cap­i­tal firms Ac­cel Part­ners and Atomico.

Trema, which is owned by Kaj Hed, the un­cle of Rovio co-founder Nik­las Hed, is ex­pected to keep a stake of 37 per cent af­ter the list­ing, down from 69 per cent now, Rovio said.

The sub­scrip­tion pe­riod starts on Sept. 18 with trad­ing ex­pected to be on the Helsinki bourse’s pre-list on Sept. 29 and on the main list on Oct. 3.

COLUMBIA PIC­TURES AND ROVIO

Sales of Rovio’s An­gry Birds game are now re­cov­er­ing on the back of the 2016 re­lease of the 3-D movie of the same name.

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