Square Enix has refuted claims about plans to go private following a report that led to a significant increase in the company's stock price

Square Enix has officially refuted rumors of its potential privatization following speculation reported by the Japanese magazine Sentaku. The magazine suggested that foreign investment funds had shown interest in the gaming company.

In a brief statement, Square Enix confirmed that "The September issue of the monthly magazine Sentaku carried a report regarding the possibility of Square Enix Holdings Co., Ltd. (the 'Company') going private." However, the company clarified, "this information was not announced by the Company" and stressed that "No consideration is currently being given within the Company to taking the Company private."

This report led to a notable increase in Square Enix's share value on the Tokyo Stock Exchange, with shares climbing up to 8.3%, as noted by Investing.com and reported by Eurogamer.

The speculation is believed to have been stirred by activist investor 3D Investment Partners, which owns about 18.5% of the company's shares. The investor has previously urged the company's board to revise their strategic plans.

Square Enix has undergone a significant restructuring over recent years, which included the sale of its Western studios to Embracer Group in 2022 and a planned layoff of over 100 employees in the US and UK by 2025, focusing more on Japanese operations.

A move to a private ownership structure would entail purchasing all existing shares at a premium, similar to how Saudi Arabia's Public Investment Fund proceeded with Electronic Arts, which resulted in EA incurring significant debt.

Recently, Square Enix announced a substantial profit increase for its first quarter, with earnings soaring by 175.5% to ¥13.2 billion (approximately $82.9 million). This growth was driven by its Digital Entertainment segment, particularly from strong sales in HD Games, MMO, and Smart Devices/PC Browser sectors.