By P.R. Venkat

Chinese internet giant Tencent Holdings Ltd. has offered to buy Leyou Technologies Holdings in an all-cash deal, valuing the company at up to 11.61 billion Hong Kong dollars (US$1.5 billion).

Tencent's offer, including options, is at HK$3.3219 per share for Leyou with an intention to delist the company from the Hong Kong stock exchange, the gaming company said late Thursday.

The Chinese internet giant aims to finance the deal from internal cash resources.

Leyou is principally engaged in the development and publishing of online multi-player PC console video games and is a leading player in the high-quality PC, console free-to-play games.

"The taking private of the company will permit the offeror and the company to make strategic decisions focused on long-term growth and benefits, free from regulatory constraints, the pressure of market expectations and share price fluctuations which arise from being a publicly listed company," Leyou said.

In July, Leyou and its controlling shareholder Yuk Kwok Cheung had entered into a privatization exclusivity agreement with a subsidiary of Tencent.

BofA Securities is advising Tencent on the deal. 



  Write to P.R. Venkat at venkat.pr@wsj.com