Playtika (NASDAQ:PLTK) introduced an escalation of its pursuit of indignant Birds recreation maker Rovio Leisure (OTCPK: RVTTY) – and BTIG, for its half, finds the provide “puzzling”.

Motion Playtika (PLTK) is 7.5% larger Friday, rebounding from a drop on Thursday after the Israel-based online game maker stated it was growing its bid for Rovio for €9.05 per share, marking a powerful premium of 60%.

This assumes that an earlier November provide (additionally with a hefty 40% premium) was rejected, seemingly on account of heavy insider participation at Rovio in Finland (the place virtually half of the shares are tightly held). Rovio Shares jumped 36% in Helsinki on Friday.

After Playtika (PLTK) $600 million takeover bid within the fourth quarter and a $25 million minority funding in Ace Video games, a deal for Rovio “would successfully drain money from Playtika’s stability sheet”, resulting in web leverage of $25 million. ‘not less than 2.3 instances EBITDA,’ stated analyst Clark Lampen.

“Primarily based on multiples, margin dilution, stability sheet impacts, and the attitude of the acquired enterprise” – declining income per every day lively consumer and declining margins – “the deal is a little bit of a stretch “.

Defenders of the deal recommend that a purchase order of Rovio matches Playtika’s technique of integrating smaller video games/studios into its Increase dwell operations belongings – or that including Rovio’s development would assist the administration to exceed PSU grant targets whereas additionally lowering the potential for Playtika’s largest shareholder (the privately owned Large Group) to strip away money from the stability sheet that might be extra productive elsewhere.

However “at first look, that is an acquisition that we count on buyers will wrestle to reward Playtika for within the quick time period,” Lampen stated. BTIG has a impartial ranking.