Caesars Interactive Entertainment social games division sale of over $4bn announced

ars Interactive Entertainment (CIE) has agreed to sell Playtika, its social games development division, to a consortium that includes an affiliate of online gaming group Shanghai Giant Network Technology, for $4.4bn.

This comes after it was rumoured that CIE could be sold in its entirety for around $4bn, with the Wall Street Journal (WSJ) reporting that gaming companies were among those interested and Bloomberg claiming bids of approximately $4bn had been made.

The WSJ reported at the time that CIE’s mobile-games business could be central to a deal.

Net revenue for CIE went up 29% to $228m for the first quarter of 2016, which the operator put down to organic “growth in social and mobile games resulting from greater monetisation of monthly unique paying users”.

CIE has made it clear that its World Series of Poker brand and real-money online gaming business will not be included in the deal.

Harrah’s bought a 51% stake in Playtika for up to $90m in 2011, with an option to buy the balance of shares within two years, and Globes reported that Caesars Entertainment bought the remaining 49% later that year.

The acquisition is expected to close in the third or fourth quarter of 2016 and Playtika will keep its headquarters in Israel.

Giant Founder and Chairman Shi Yuzhu said: “Playtika's growth has been exceptional, and highlights its outstanding team, excellent corporate culture, cutting-edge big data analytics, and its unique ability to transform and grow games.”

Mitch Garber, CIE Chairman and CEO, said: "It has been a particularly rewarding experience growing Playtika from a 10-person start-up, when CIE acquired them in 2011, into a global leader.

“Playtika today is a highly profitable growth company with more than 1,300 employees, multiple top grossing titles and millions of daily users. Robert is a true visionary and Israeli business leader who has created not only a great business, but also the most unique corporate culture I have seen in my career."

Caesars Entertainment will release its financial results for the second quarter of 2016 on Tuesday.