Opera Software to sell part of consumer business after buyout scrapped

Opera Software confirmed it would sell part of its consumer business to the Chinese Kunqi consortium after a plan by the consortium to buy 100 per cent of the Norway-based company was cancelled over the weekend.

Opera, which specialises in mobile web browsers and mobile advertising, said the original NOK10.5 billion (€1.1 billion/$1.24 billion) offer had failed to gain necessary government consent by the drop-dead date of Jul. 15. Both parties had thus decided not to extend the offer any further.

Instead, Opera agreed on an alternative transaction to sell its web-browser business for $600 million (€543 million) to the same consortium, which is led by private-equity firm Golden Brick Capital Management. Opera will keep other parts of its business such as applications and games. The transaction is expected to close in the third quarter of 2016.

Opera's CEO, Lars Boilesen, will serve as CEO for both Opera and the consumer business until Dec. 31, 2016.

"After this date, Lars will no longer hold the role as CEO for the consumer business, and will be solely dedicated to Opera," Opera said in a stock market filing.

The original offer was launched on Mar. 15 and was conditional on a minimum acceptance level of 90 per cent of the shares.

The Chinese consortium then extended the offer period until May 24 to allow more time for acceptances by existing shareholders, but stressed there would be no further extensions to the offer period; the original timeframe had already been extended once from Apr. 5 to Apr. 14. The consortium also previously said it expected to receive regulatory approval by the end of June, but that has clearly not been forthcoming.

Bloomberg noted that the original planned deal needed clearance from Chinese authorities and the Committee on Foreign Investment in the U.S. The news agency added that Opera's shares fell as much as 17 per cent following the news that the 100 per cent buyout had been cancelled.

In detail, the transaction includes Opera's mobile browser business, including operator co-brand solutions; the desktop browser business; performance and privacy apps; Opera's technology licensing business outside of Opera TV; and Opera's 29.09 per cent ownership in the Chinese joint venture nHorizon.

Opera will retain Opera Mediaworks; Opera Apps & Games (including Bemobi); and Opera TV. In 2015, these business units generated revenue of $467 million, and adjusted EBITDA of $74 million.

Opera currently estimates that in 2016, the same three remaining business units will deliver revenues of $570 million-$605 million (+22 per cent to +30 per cent) and an adjusted EBITDA of $75 million-$90 million (+2 per cent to +22 per cent).

For more:
- see the Opera statement
- see this Bloomberg article

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