Embattled game developer Mighty Kingdom in buyer’s sights

The Michelle Guthrie-chaired Mighty Kingdom is courting takeover interest as directors, the chair included, signal their confidence with a major capital injection.

Mighty Kingdom chair Michelle Guthrie.

Embattled game developer Mighty Kingdom says it has received “several unsolicited enquiries’’ expressing interest in the company.

Takeover interest in the Adelaide firm, chaired by former ABC managing director Michelle Guthrie, was flagged by The Australian last month after the company’s shares dipped to 1.1c - a fraction of the 30c a share the company listed at in April 2021 after raising $30m.

That money was rapidly spent, with the company having to raise capital last year and again this month to keep the lights on.

But Mighty Kingdom believes a turnaround is on the cards, telling the ASX in late August that its full year revenue was up 20 per cent year on year to a record $9.8m, its second-half loss had dropped a massive 76 per cent to $1.7m as a result of a “complete overhaul of business operations’’ and that it had had recent wins on the contract front.

On Tuesday Mighty Kingdom, whose shares closed at 1.1c with just one trade executed, said it was fielding interest for a possible transaction.

“In response to this interest, the board of Mighty Kingdom has decided to undertake a strategic review process of the company with the view of maximising shareholder value,’’ it told the ASX.

“As part of this review process, Mighty Kingdom is considering all options with respect to its business including but not limited to, a whole or partial divestment, joint venture arrangement or a strategic investment into the company to further growth and development.’’

The company said it had not made a decision on the possible structure of any deal and warned nothing might eventuate from the strategic review process.

Cerberus Advisory and Motus Legal are advising the company.

Mighty Kingdom also said on Tuesday it had conducted a share placement to raise $1m, with directors and sophisticated investors taking up the shares at 1c apiece.

Chair Michelle Guthrie will participate in the raise, as will interim chief executive Simon Rabbitt.

Mr Rabbitt assumed the interim role after former chief executive Shane Yeend, who assumed the top role only in May, quit in early September.

Mighty Kingdom is currently seeking to recoup $2m in unpaid money it says is owed by Mr Yeend, arising from a capital raise more than a year ago.

That $7m capital raise in August last year – at 3.5c per share – brought Mr Yeend’s Gamestar+ company on as a major shareholder with a circa $4m commitment, of which about $2m has been paid.

Mighty Kingdom recently appointed a law firm to handle the matter. Mr Yeend says he does not owe the money due to the failure for conditions to be met, which is disputed by the company.

Mighty Kingdom is now valued at slightly more than $4m.

Originally published as Embattled game developer Mighty Kingdom in buyer’s sights