In key news on UK stocks, Keywords Studios PLC (GB:KWS) shares soared by almost 6%, as of writing, after the company received an updated potential cash offer from Sweden-based PE (private equity) firm EQT. The company stated in its update that it will recommend the new offer of £24.50 per share to its shareholders. The revised offer marks a slight decline over the £25.50 bid proposed in May.
Keywords rejected four unsolicited offers from EQT earlier, before initiating advanced discussions last month regarding a proposed bid of £25.50 per share. EQT has until July 3rd to either make a formal offer or withdraw.
Year-to-date, Keywords shares have gained 44.3%, driven by the news around its potential takeover.
Keyword Studios is a service company catering to the global video game industry. The services include game development, marketing, community management, and more.
Keywords’ Trading Update
In addition to the offer details, Keywords Studios also issued its trading update and full-year 2024 outlook. According to the update, the company is facing a slowdown in demand, with cancellations of some large game development projects. The company projected an approximately 7% increase in reported revenue for the first half of the year.
However, the company is observing encouraging trends in the industry and is expecting a stronger recovery from U.S. clients. This reinforces confidence in the second-half performance, with projected organic growth of approximately 10%.
Additionally, the company announced the payment of a final dividend of 1.76p per share on June 28.
Is Keywords Studios a Buy or Sell?
According to TipRanks’ consensus, KWS stock has a Strong Buy rating based on three Buy and two Hold recommendations. The Keywords Studios share price target is 2,193.75p, which is 0.72% above the current trading level.
