Level Up paid P64.5M, stocks for e-Games

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Tech group IPVG got a combination of cash, shares of stock in Level Up, and a stake in Playweb Games to relinquish control of e-Games. The ?total consideration? was contained in a disclosure that was filed by e-Games with the Philippine Stock Exchange last week. E-Games was online gaming subsidiary of IPVG, which is now refocusing its business objectives towards mining. In the disclosure, e-Games revealed that it received from Level Up the following:

? $1,500,000.00 (about P65.4 million)

? 4,755,926 Common A Shares in Level Up Inc. (LUI), to be issued out of its unissued stock and out of its proposed increase in authorized capital stock, that is equivalent to 30 percent of LUI?s total outstanding capital stock; and

? a commercial interest in Playweb Games Inc., a subsidiary of LUI that operates all the game titles and services under the Level Up brand in the Philippines.

E-Games said the purchase price was based on the revenue and earnings generated by the company on its online games publishing business. But unlike most acquisitions, e-Games did command a premium for its market price. ?Due to the strategic nature of this merger, and the sale of equity was considered to be an integral part of the merger transaction, LUI did not attach a financial premium to the value of the shares sold,? the company explained. Due to the economies of scale and dominant market positioning of their merged business, e-Games said it anticipates a much higher valuation for its remaining stake in LUI. ?The synergies with LUI go beyond online games publishing. It provides a larger advantage to the company?s Internet caf? operations and franchising opportunities where the company?s top content portfolio can offer unique game enhancements and other gamer incentives not enjoyed by its competitors,? it added. The disclosure also stressed that while the transaction involved the merger or combination by both LUI and e-Games of their online games publishing business, the parties remained to be two separate entities and that no merger of the companies themselves was involved.]]>

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