Square Enix, the Japanese publisher and developer behind Final Fantasy, Kingdom Hearts, Dragon Quest and many other legendary franchises, has had to release a statement to quash claims it’s going private.
Square Enix’s statement was issued in response to a report in Japanese business magazine Sentaku, which claimed the Japanese publisher was exploring the possibility of going private, and had interest from foreign investment funds. The report boosted the value of Square Enix’s stock price on the Tokyo Stock Exchange by seven-to-12 percent yesterday.
“The September issue of the monthly magazine Sentaku carried a report regarding the possibility of Square Enix Holdings Co., LTD. (the ‘Company’) going private. However, this information was not announced by the Company,” Square Enix said in a statement published on the same day. “No consideration is currently being given within the Company to taking the Company private.”
As to where this rumour of Square Enix going private began, Investing.com reported that major shareholder 3D Investment Partners, which holds around 18.5 percent of Square Enix’s shares, may have been a factor in the speculation. The investment firm previously criticised Square Enix’s management plan, calling on the board of directors to reassess the company’s strategy.
Square Enix has undergone multiple rounds of layoffs over the last four years, as the company began a mission of reorganising its corporate and development structures. Square Enix sold its Western studios – Crystal Dynamics, Eidos Montreal and Square Enix Montreal – to Embracer Group in 2022. Three years later, Square Enix laid off over 100 staff across the US and UK, and consolidated its publishing and development efforts in Japan.
Should Square Enix go private, whoever buys it would have to buy back all of Square Enix’s shares, paying a premium on top. As we recently saw when Saudi Arabia’s Public Investment Fund (PIF) acquired EA, and took it off the stock market, it left the publisher saddled with billions of dollars in debt, which will take years to clear and no doubt require major shifts in the company’s strategy.
