The Guillemot family, the founding family of Tencent Holdings and Ubisoft Entertainment SA, is considering various options, including a possible acquisition of the French video game developer, which has lost more than half its market value this year, according to people familiar with the matter.
The Chinese technology company and the Guillemot Brothers have been talking to advisers to help explore ways to stabilize Ubisoft and increase its value, people familiar with the matter said. The person spoke on condition of anonymity to discuss private matters. One of the possibilities being discussed is joining forces to take the company private, people familiar with the matter said.
Ubisoft shares rose 33% in Paris on Friday following the Bloomberg News report, the company’s biggest gain since its initial public offering (IPO) in 1996.
This year, Ubisoft’s share price has fallen by about 40%, and the company’s market capitalization is about 1.8 billion euros (about 16,577 crore rupees). According to Ubisoft’s latest annual report, as of the end of April, Tencent owned 9.2% of Ubisoft’s net voting rights, while the Guillemot family held about 20.5% of the shares.
Some minority shareholders, including AJ Investments, have been pushing to take Ubisoft private or sell it to strategic investors as its stock price plummets. Considerations are at an early stage and it is uncertain whether a deal will result. Tencent and the Guillemot family are also considering other options, people familiar with the matter said.
Spokespeople for Ubisoft and the Guillemot family declined to comment. A Tencent representative was unavailable for immediate comment due to a holiday in China.
Ubisoft shares fell to their lowest in more than a decade last month after the company cut its outlook due to lower-than-expected sales and the delay of its highly anticipated Assassin’s Creed Shadows game. Over the past few years, the video game company has struggled to recover from a pandemic-era production crunch that resulted in new game launch delays and game cancellations.
Bloomberg reported at the time that multiple private equity firms including Blackstone Inc. and KKR & Co. were studying a potential bid for Ubisoft in 2022 amid a series of large deals in the video game industry. Later that year, the founding family partnered with Tencent, which, in addition to its direct stake in Ubisoft, acquired a 49.9% stake in the Guillemot Brothers holding company.
Analysts see the deal as a way to thwart acquirers and allow the brothers to retain control of Ubisoft’s governance, while Tencent’s stake is capped at less than 10% and it has no operational veto power. According to the agreement, Tencent cannot sell its shares in Ubisoft for five years, after which the Guillemot family has the right of first refusal. Ubisoft Chairman and CEO Yves Guillemot said in an interview last year that the agreement still allows the brothers to talk and work with whomever they want.
© 2024 Bloomberg
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
