Four Tree Island Advisory calls DoubleDown $11.25 offer too low

Four Tree Island Advisory LLC, which describes itself as a top-15 shareholder of DoubleDown Interactive Co., Ltd. (NASDAQ: DDI), has written to the company's special committee urging it to reject DoubleU Games Co., Ltd.'s $11.25 per ADS buyout proposal, arguing the offer materially undervalues DDI.

In a letter dated Aug. 17, 2026, Four Tree Island Advisory said DDI is worth at least $26.40 per ADS in a transaction, based on a valuation framework applying a 4.3x multiple to expected 2026 adjusted EBITDA of at least $165 million, plus an anticipated year-end net-cash position of approximately $570 million.

The firm cited several financial developments since DoubleU Games first announced its proposal. DDI's trailing-twelve-month revenue has risen approximately 5.6% from year-end 2025 levels, while trailing-twelve-month adjusted EBITDA has grown approximately 9.3% over the same period. Cash per ADS increased from $9.89 at year-end 2025 to approximately $11.18.

Four Tree Island Advisory referenced Playtika Holding Corp. as a publicly traded comparable, noting Playtika trades at approximately 4.3x trailing-twelve-month adjusted EBITDA despite facing declining EBITDA, a net-debt position that has increased roughly 24% since year-end 2025, and contingent obligations from its SuperPlay acquisition that may exceed $370 million. The firm also noted that B. Riley recently raised its DDI price target to $24 per ADS using a roughly 4.0x EBITDA framework.

DoubleU Games stated on its Aug. 12, 2026 earnings call that it plans to submit additional SEC documentation after the third quarter and intends to pursue taking DDI private in the fourth quarter.

Four Tree Island Advisory also proposed an alternative scenario in which DDI repurchases DoubleU Games' stake on the same economic terms being offered to minority shareholders. Under that structure, DoubleU Games would receive approximately $372 million, and minority shareholders would retain full ownership of the business with roughly $182 million in remaining cash and more than $165 million in expected 2026 adjusted EBITDA.

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