(P1) Four Tree Island Advisory LLC, a top-10 shareholder of DoubleDown Interactive Co., Ltd. (DDI), has urged the company’s Special Committee to reject an $11.25 per ADS takeover proposal from controlling shareholder DoubleU Games Co., Ltd.
(P2) "We believe the proposed transaction materially undervalues DDI and fails to reflect both the Company’s current operating performance and its forward earnings power," Four Tree Island Advisory said in a public letter released on May 4, 2026.
(P3) The advisory firm argues the offer assigns "negligible value" to DDI's operating business, estimating an implied enterprise value of only $36 million. This is a stark contrast to October 2021, when DoubleU Games acquired shares at $18 per ADS, implying a $695 million enterprise value and a 6.0x EBITDA multiple. The current offer represents a 95% reduction in implied enterprise value and a multiple of just 0.25x EBITDA.
(P4) Four Tree Island highlights that DDI's EBITDA has grown over 22% to $142.4 million since 2021, and the company has expanded by acquiring SuprNation and WHOW Games. The firm is calling for an independent appraisal and encourages other minority shareholders to voice their concerns.
Four Tree Island Advisory contrasted the offer's implied 0.25x EV/EBITDA multiple with that of Playtika Holding Corp., which it identified as the only relevant U.S.-listed peer. Playtika currently trades at approximately 4.6x EV/EBITDA.
The firm also pointed to independent research supporting a higher valuation for DDI, citing price targets of $23 from Texas Capital Securities, $21 from Wedbush, and $16 from Roth Capital. The advisory firm argues that the current proposal from DoubleU Games "woefully fails to reflect" the strategic value of DDI.
Four Tree Island has called on the Special Committee to conduct an independent appraisal of the business with the assistance of unconflicted financial and legal advisors. The firm stated that any proposal put forth for minority shareholder approval must fully and fairly reflect the company's intrinsic value.
The shareholder activism introduces significant uncertainty for the acquisition. A rejection of the current offer could force DoubleU Games to increase its bid, potentially creating upside for DDI's stock. Conversely, the deal's collapse could see the stock price fall. Investors will now watch for the Special Committee's response to the public pressure.
This article is for informational purposes only and does not constitute investment advice.
