Rovio Entertainment the mobile games maker based in Finland has set a price on Friday for its planned initial public listing that would value the Angry Birds maker at as much as $1.1 billion, far below the possible values that the media has reported.
The company, which is recovering after a difficult past few years, announced its long-awaited IPO this month and said its goal was to increase growth and take part in the consolidation of the gaming industry.
First reports from the media said that the company could have a value of as much as $2 billion in this flotation, though many analysts already had questioned if that was possible to achieve.
The opening price range of between €10.25 and €11.50 a share that was announced Friday, would give a market value of Rovio of between €802 million and €896 million or approximately between $950 million and $1.1 billion.
If it were as was rumored, the value would be far too high, said only Helsinki based analyst.
Looking at Rovio’s sales, the valuation puts the company on a level with its peers, but includes expectations of profit growth.
Rovio, whose mobile games have been downloaded over 3.7 billion times, expanded rapidly following the first Angry Birds that launched in 2009.
However, Rovio did not respond quickly to the shift to mobile games being freely available that makes revenue from purchases in-game. Its business declined quickly as games from its rivals like Clash of Clans and Candy Crush Saga took its market share.
Rovio posted a loss and cut one third of its employees during 2015. However, sales have now started to recover following the release in 2016 of Angry Birds the 3D movie, and new games.
The company is expecting to sell approximately 55% of its overall shares in this flotation, raising between €438 million and €488 million.
Just €30 million would go into the coffers of Rovio, with the majority going to major owners that included Trema International as well as Atomico and Accel Partners two venture capital businesses.
Trema, which Kaj Hed, the uncle of Niklas Hed, the co-founder of Rovio, is expected to maintain a 37% stake following the listing, down from its current 67%.
The period for subscription begins September 18, with first trading expected to start on the bourse in Helsinki pre-listing September 29 and main listing October 3.