Mysterious Bidder's Offer for DoubleDown Stalls Over Financing Problem

DoubleU Games announced that, as the majority shareholder of social casino game developer DoubleDown Interactive, it will make an all-cash offer of 184 million dollars to buy the company's remaining shares at 16.25 dollars per share. This price is 44% higher than the price discussed in April. The South Korean company, which is listed on Nasdaq, reported in its third-quarter results announced on November 11 that revenue was nearly flat at 94.3 million dollars. Its online casino segment rose 7.3% to 17.4 million dollars, helped by the Los Vegas brand.

Mandatory merger filings also revealed a second source of interest. An unnamed party, "Party A," approached the company's CFO, Joseph Sigrist, through an adviser on May 27. At a June 4 meeting, it became clear that this buyer is a strategic investor listed in the US with global operations, and that it knows both DoubleDown and the gaming sector. At that time, the buyer suggested it could offer a price well above DoubleU Games' offer of 11.25 dollars.

On June 25, Party A submitted a non-binding written offer of 15 dollars per share. This offer valued the company's entire equity at 744 million dollars. In later discussions, the price was raised to 17 dollars. That figure was above the 16.25 dollar price DoubleDown ultimately agreed to.

However, the plan had significant problems. Party A disclosed that it had only 41 million dollars in cash. According to the buyer, the cash needed to complete the deal, after deducting DoubleDown's own net cash, would be approximately 245 million dollars. Financing concerns and the objection of the majority shareholder prevented the proposal from moving forward.