The manufacturer of gaming hardware and peripherals Razer could become a private company, if the rumors that according to Reuters suggest that a group of company executives has a plan for this. If the plan is carried out, Razer’s valuation could skyrocket up to 4.5 billion of dollars.
Its shares have traded during the past month at an average of $ 0.267 on the Hong Kong stock exchange, although a group of company executives, led by the Razer President Min-Liang Tan, and one of its directors, Kaling Lim, who add up to 60% of the company’s shares, are willing to offer almost double this amount for all of them. This decision, it seems, is because managers believe that Razer has been undervalued in Hong Kong, as there is more importance given to companies from mainland China.
In a communication to the Hong Kong regulatory authorities presented this week, the company cited its board, which stated that there was no certainty that the operation would be carried out, that the offer price was not fixed and that it was not no firm decision had been made in this regard. This was not an impediment for Razer shares to rise 11.5% on the news of the presentation of this communication, after they rose 23% the day before, when rumors began to circulate.
Razer, which is headquartered between the United States and Singapore, became a public company in 2017, when it began trading on the Hong Kong Stock Exchange, where it has the market identifier 1337. For now, its Those responsible have not wanted to make any comment about this rumor of turning the company private and taking it off the stock market.
Last October, Razer confirmed that Tan and Lim were conducting preliminary contacts and meetings with financial investors to explore the possibility of carrying out this transaction. In addition, the group of executives behind the plan is also negotiating with the venture capital entity CVC Capital Partners ahead of the operation.
The investor KKR has also studied the agreement, but still would not have made the decision to invest or not. In any event, the negotiations are apparently at a very advanced stage, and Razer intends to announce the deal before the end of 2021. Apart from this, the group would also intend to later go public in New York. Razer, with the aim of achieving a higher valuation.
The company achieved a net profit in the first half of 2021, when it achieved net income of $ 31.3 billion, thanks to the gaming boom due to COVID-19 and its restrictions, surpassing the losses of $ 17.7 billion it had in 2020. Its sales in the United States contributed 42% of its revenue for the first half of this year.