'Candy Crush' maker seeks valuation up to $7.6 billion

King Digital Entertainment (KING), maker of the popular smartphone game "Candy Crush Saga," is offering shares in its initial public offering at a price that values the whole company at as much as $7.6 billion.

King, whose owners include Apax Partners LLP and venture capital firm Index Ventures, could raise as much as $533 million by selling 22.2 million shares for $21 to $24 apiece, according to a filing today. The company plans to use the funds for working capital and acquisitions and has applied to list its shares on the New York Stock Exchange under the symbol KING.

At the high end, King would be valued at 4 times last year's sales, compared with 6 times at Zynga Inc. (ZNGA), a pioneer in social gaming. Zynga's "Farmville" game faded in popularity as users defected to "Candy Crush," and its shares have slumped 44 percent since its 2011 IPO. The discount may reflect investors' skepticism about the prospects for "Candy Crush," according to Arvind Bhatia, analyst at Sterne Agee & Leach Inc.

"'Candy Crush' is in slight decline and I think that's what investors will focus on," Bhatia said by phone from Dallas. "They are trying to be cognizant of what happened to Zynga."

King's average monthly unique players declined to 12.2 million in the three months to December from 13 million in the third quarter, according to the prospectus.