Huya Inc (NYSE: HUYA), a leading Chinese online gaming platform today announced that it had received a preliminary non-binding offer letter from Tencent Holdings Ltd proposing that Huya and DouYu International Holdings Limited merge in an all-stock deal.
The deal would see Huya shareholders acquire all outstanding shares of Douyu Ltd, while Douyu shareholders would receive a yet to be agreed upon number of newly issued Huya Class A ordinary shares.
The proposal comes after Tencent acquired over 30 million Huya shares from JOYY Inc., through its subsidiary Linen Investment Limited in a cash deal valued at $810 million. The deal indicates that Tencent is keen to acquire Huya Ltd or at the very least become a majority shareholder in the popular online game streaming service.
Huya share price
Huya shares jumped 12.3% to hit a high of $29.95 premarket before erasing most of its gains to trade 4.27% higher at $27.55.