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According to a familiar source with the matter, Tencent Holdings Ltd. nears deal to take Leyou Technologies Holdings Ltd. private, which would value the Chinese gaming firm at about 1.3 billion dollars.

The people, who asked not to be identified as the information is private, also confirmed that the companies are in discussion on an offer price range of HK$3.30 to HK$3.40 for each Leyou share. Charles Yuk, the major shareholder of Leyou with about 69% of the Hong Kong-listed firm as of the end of December, is said to have plans to sell his entire stake in the company.

According to Bloomberg News report, shares of Leyou erased earlier losses and jumped as much as 4.8 percent with the stock closing up 2.9% at HK$3.20, which gave the company a market value of about 1.27 billion USD.

The source said that negotiations between the two countries are in an advanced stage with the aim of announcing an agreement as soon as this week. Meanwhile, discussions could still be delayed or might fall apart and details such as offer price and timeline have not been concluded. Representatives for each side didn’t immediately respond to requests for comment.

An agreement would mark the end of about a yearlong process that has started since at least September. Bidders consisted of Japanese tech giant Sony Corp., Zhejiang Century Huatong Group Co., Tencent-backed iDreamSky Technology Holdings Ltd., a Shenzhen-listed gaming firm that also counts Tencent as a shareholder, and other private equity firms.

Leyou produces games such as free shooting games Dirty Bomb and Warframe. The gaming firm and Amazon.com Inc. are also coordinating to make a video game based on the famous series The Lord of the Rings.

Leyou reported a $5.8 million loss in the first half of the year and attributed the loss in part to the Covid-19 pandemic’s impact on the ability to develop fresh content for Warframe.

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