China's Tencent to buy 14.6 percent stake in Glu Mobile

(Reuters) - Tencent Holdings Ltd <0700.HK>, the dominant social networking and online entertainment company in China, has agreed to buy 14.6 percent of mobile game developer Glu Mobile Inc for $126 million. Shares of Glu Mobile, which developed Deer Hunter and Kim Kardashian: Hollywood games, rose about 24 percent in extended trading on Wednesday. Tencent has been aggressive in taking on giants such as Alibaba Group Holding Ltd and Xiaomi Inc [XTC.UL] in the smart hardware industry. Tencent launched on Tuesday an operating system for internet-connected devices such as TVs and watches that is open to all developers. The Chinese company will pay $6 per share for its stake in Glu Mobile, which represents a premium of about 11 percent to the stock's closing price on Wednesday. Tencent will buy the shares in two tranches: 12.5 million shares on Wednesday followed by a further 8.5 million some time in the second quarter. Cowen and Co LLC provided a fairness opinion to Glu Mobile's board in connection with the deal. Glu Mobile's shares were trading at $6.69 after the bell. (This version of the story adds the background and Glu Mobile results) (Reporting by Devika Krishna Kumar and Anya George Tharakan in Bengaluru; Editing by Robin Paxton)