Tencent Acquires Minority Stake in Dontnod Entertainment

Dontnod Announces a Business Cooperation Agreement With Tencent and the Simultaneous Launch of Approximately €40 Million Capital Increase tto Finance Its Expansion Into More Self-Publishing Games

Dontnod Entertainment (‘Dontnod' or the ‘Company'), an independent French studio that creates and develops video games, today announced the launch of a capital increase without preferential subscription rights for the benefit of a category of persons and intended exclusively for qualified investors, as defined in Article 2(1)(e) of EU Regulation 2017/1129 of June 14, 2017, through an accelerated bookbuilding process, for an expected amount of €40 million (the ‘Offering'). The new shares will be admitted to trading on the Euronext Growth market in Paris.

On the basis of the maximum authorized size of the Offering of €50 million, the maximum number of shares to be issued would be 3,125,000 new shares.

In connection with the Offering, Tencent Holdings Limited (‘Tencent'), a leading internet services provider, has undertaken to invest €30 million to support the studio's development through its subsidiary Proxima Beta Europe BV. As part of this investment, Tencent has an option to propose the appointment of a representative on the Board of Directors.

The funds raised will mainly be used to finance the ramp-up of Dontnod's strategy to develop new self-published intellectual properties worldwide on PC, consoles and mobile platforms, and thereby take full advantage of positive trends within the industry for creators of internationally renowned and original games, such as Dontnod.

Dontnod is also proud to announce the concurrent signing of a business cooperation agreement with Tencent.

Oskar Guilbert, Chairman and Chief Executive Officer of Dontnod, said: “We are delighted to welcome Tencent as a Dontnod investor. This is a real expression of trust from a key online game leader, which is behind a number of success stories and has invested in several leading companies in the video game industry. Through this partnership, Dontnod is perfectly positioned to take advantage of the various growth drivers in the video game industry, in particular in China and on mobile platforms, in cooperation with an industry leader. The capital increase announced today will enable us to step up and boost the roll-out of our development plan, which aims to capture more value from our original creations by self-publishing more games. ”