Playtika (NASDAQ:PLTK) has introduced an escalation of its pursuit of Angry Birds sport maker Rovio Entertainment (OTCPK:RVTTY) – and BTIG, for one, finds the provide “perplexing.”

Playtika inventory (PLTK) is 7.5% increased Friday, rebounding from a Thursday decline after the Israel-based videogame maker mentioned it was elevating its provide for Rovio to €9.05 per share, marking a hefty 60% premium.

That presumes that an earlier November provide (additionally at a excessive premium, of 40%) was rejected, seemingly as a consequence of heavy insider possession at Finland’s Rovio (the place almost half of shares are carefully held). Rovio shares jumped 36% in Helsinki Friday.

After Playtika’s (PLTK) $600M tender provide within the fourth quarter, and a $25M minority funding in Ace Games, a deal for Rovio would “successfully drain Playtika’s steadiness sheet money,” resulting in internet leverage of at least 2.3 occasions EBITDA, analyst Clark Lampen mentioned.

“Based upon the multiples, margin dilution, steadiness sheet impacts, and optics of the acquired enterprise” – decrease income per day by day energetic person and declining margins – “the deal is a little bit of a stretch.”

Deal defenders counsel a Rovio purchase suits Playtika’s technique of becoming smaller video games/studios into its Boost dwell operations belongings – or that including Rovio’s progress would assist administration exceed PSU grant targets whereas additionally decreasing the potential for Playtika’s largest shareholder (personal Giant Group) to strip away steadiness sheet money that will be extra productive elsewhere.

But “on the floor, that is an acquisition that we count on buyers would have a troublesome time rewarding Playtika for within the quick run,” Lampen mentioned. BTIG has a Neutral score.