Best known for their Browser, Opera Software also has ties in the TV and VPN markets. Originally, the Kunqi consortium were going to buy all of their assets, but this has now fallen through.
U.S. privacy regulations mean that the acquisition could have been delayed for up to a year, pending investigation. As a result, the conglomerate instead purchased only the desktop and mobile browser, as well as its performance and privacy apps. The acquisition also includes Opera's technology licensing business and it's stake in Chinese venture nHorizon.
On Monday, a Kunlun spokeswoman told Reuters:
“It was because of Opera's other services, and inolves many user's privacy. This would be extremely rigorously investigated during the U.S. government's audit and probably would have delayed the entire acquisition process by six months to a year. So we opted for a better method, and chose Opera's core assets, namely the consumer business, as the target of the acquisition. That greatly accelerates the acquisition process”
These changes also knocked the deal down from $1.2 billion to $600 million. The Kunqi consortium will get no access to the company´s marketing, TV operations, or game related apps.
Following the flag of shares for potential regulatory issues last week they fell by 17 percent, before eventually recovering to 11 percent higher than before. Opera Chairman Sverre Munck said about the issues, “No regulators have said no. We have not received an answer within the agreed deadline.”
Rather than any failure on Opera's part, the Committee on Foreign approval did not process the deal in time. Both companies could have decided to postpone the deal, but decided that the alternate offer was more worthwhile.
“A vast part of the investors are disappointed. We understand that, and we are also disappointed that the original offer didn't go through,” said Munck.
The new deal should close late in the third quarter, with the proceeds expected to go to shareholders, share buyback, and debt repayment. Munk did not mention the payout of the new dividends, but Norne Securities analyst Karl-Johan Molnes has a prediction:
Rather than the original payout of 71 crowns per share, shareholders are will receive a maximum of just 30.