How Ubisoft Is Preparing for (Possible) Vivendi Hostile Takeover

French company meeting with investors and even Canadian government as part of "fight to preserve our independence."

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Vivendi, the French media conglomerate that once owned Activision Blizzard, currently holds a more than 10 percent stake in Assassin's Creed and Far Cry publisher Ubisoft. The company increased its stake to that amount from 6.6 percent last year, in a move that Ubisoft called "unsolicited and unwelcome."

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After Vivendi's initial investment into Ubisoft last year, Guillemot said in an email to staffers that the company would "fight to preserve our independence." Now, The Globe and Mail reports that Ubisoft is doing just that, seeking Canadian investors to help the company fight a possible takeover.

Ubisoft management, including founder and CEO Yves Guillemot, met this week with "a dozen potential investors" in Montreal and Toronto in an effort to "build support for the company's founders and current management."

As The Globe and Mail points out, though Ubisoft is based in France, its biggest development studio is in Montreal. That team has worked on games in the Assassin's Creed, Far Cry, and Watch Dogs franchises, among others.

The site goes on to say that Vivendi has also made an unsolicited offer to buy Gameloft, a mobile game company based in France and run by Guillemot's brothers. It is reported that the hostile bid for Gameloft represents the "first step in Vivendi's larger ploy to force talks with the Guillemot family" about taking over Ubisoft.

In an interview with The Globe and Mail, Guillemot said he didn't think Vivendi would shut down Ubisoft's Canadian studios, but that they would be better protected if Ubisoft remained independent. He also pointed out that remaining independent would allow Ubisoft to have more "operational agility" instead of being forced to work on projects for Vivendi franchises.

"We want to increase the number of Canadian shareholders in Ubisoft to have better control over the capital," Guillemot said. "We feel it's a good defense."

Guillemot went on to say that he recently met with Quebec Premiere Philippe Couillard and would welcome an investment from the government. Support from Ottawa would also be accepted, while Guillemot also confirmed that he met with unspecified investors in London.

He and his brothers together own around 9 percent of Ubisoft's equity and 16 percent of voting rights. Two major outside shareholders, Blackrock and Fidelity, together own around 15 percent and side with current management, according to The Globe and Mail.

The next Ubisoft shareholder meeting is scheduled for September. Guillemot said he needs the support of 50 percent or more of voters to stop Vivendi from making changes to its current board of directors.

If Vivendi is successful in taking control over Ubisoft, it could face a "monumental challenge," according to The Globe and Mail.

"If it can't coax the Guillemot brothers into a friendly deal, it runs the risk of losing not only them but employees loyal to them in an industry that depends on creative talent," it reported.

The full Globe and Mail story is a fascinating read, packed with interesting insight.

It's unclear what impact Vivendi's continued acquisition of shares could have on Ubisoft. But considering Ubisoft is among the biggest game publishers in the world, with franchises like Assassin's Creed, Far Cry, and Just Dance under its umbrella, we'll be continuing to monitor this story closely.

Vivendi is the former owner of Activision Blizzard. The company began looking to sell off its majority stake in the publisher in 2012 and eventually did so in 2013. It still owns part of the company, but that figure--roughly 12 percent after the 2013 sale--is now less than six percent.

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jerusaelem

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Vivendi has secured the Apple of Eden! All hail the new Templar overlords!

Lets see you parkour your way out of this one, Ubi...

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wexorian

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Wel wel well, how that overmilking same games and crappy new ip's work ? Fight for independence now , you get what you deserve ubi.

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blue-peregrine

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Vivendi Ubisoft.

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EdwardNygma

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I don't even care about Vivendi just take down Ubisoft. You don't need to climb to the top of any towers to see how pathetic they are.

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hystavito

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I totally thought they'd be preparing by deploying barbed wire and ballistic shields, reinforcing walls, etc.

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deactivated-5a803cda1fb41

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Vivendi and Ubisoft kind of deserve each other to be honest.

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NL_Skipper

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Edited By NL_Skipper

It sounds like a rough spot to be in, but I gotta wonder how they've been treating current investors if they're actually worried about not getting the 50% vote they need... if they were a pleasant investment to deal with I'd think it wouldn't be an issue for most shareholders to agree to keep the current board in place. I guess the flip side is that it could see a big spike in the share value if Vivendi were to come on board, and that'd be enough to make a lot of people cut ties and take it to the bank.

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BassMan

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Maybe a shakeup is needed. They haven't exactly been putting out the best or most original games for many years. They use the same tired formula for most of their games and their quality control is the shits. So many broken games. I am not saying that a Vivendi controlled Ubisoft would be good, but something needs to change either way.

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megakoresh

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Edited By megakoresh

Ubisoft are the best of companies, and Rainbow Six Siege is the last good game they released since Black Flag (and before that the last good game was... I don't even remember). But whatever they are, you can all be sure that Vivendi is worse. If you kept up with news over the last decade, you'll know that no matter how evil you think Ubisoft or EA or whoever are, Vivendi is more evil. They are basically as evil as they come, why do you think Activision stopped being "evil" right after buying themselves out? Hell, I am pretty sure the whole merge of Blizzard and Activision was to get rid of Vivendi to begin with.

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sev2010

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Edited By sev2010

I hope they wipe Ubisoft out:) Hate the company. In fact, more than EA. Used to like their games though; but after all the 'bait and switch' bullshits they exercised this gen, I can easily wish them the worst.

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rlg5150

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@sev2010: Right. That's what's going to happen. They are buying them out just to wipe them out.

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GirlUSoCrazy

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@sev2010: Since they stopped making Prince of Persia, the only thing I can think of that I am looking forward to is Beyond Good & Evil 2

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wexorian

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@girlusocrazy: Keep looking forward for it, they can't release Prince of persia franchise or B&E because people who own it are not in ubisoft quiet long.

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Stiler

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Their own fault for ever going below 51%, everyone know sif you don't want to risk this you always keep a majority stake.

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finaldasa

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@Stiler: Unfortunately that's not how investment usually works for any company, private or public.

Typically, before you go public, your company has already been divided up between investors. Family members. angel investors, investment firms, banks, option pools (stock set aside for employees), venture capitalists, etc., all take a piece of the pie. That's usually all before you even go public and allow people to buy, sell, and trade a small portion of your company's stock.

What's worrying about Vivendi isn't that they could get 50%, it's 30% Ubisoft is worried about. At 30% Vivendi is required, by French law, to offer a buyout bid. Ubisoft wants to have more investors, ready to ignore Vivendi's offer, in hopes of preventing Vivendi from getting close to 50% during that buyout.

Vivendi is currently at 30.01% in Gameloft stock and attempting to buy them out too. Ubisoft's CEO's brother is the CEO of Gameloft. So he has a front row seat to what Vivendi will likely try to do to his company next.

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GirlUSoCrazy

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Edited By GirlUSoCrazy

@finaldasa: Nice posts in this thread

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finaldasa

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@girlusocrazy: Thanks!

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GirlUSoCrazy

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Edited By GirlUSoCrazy

@finaldasa: :) (not that it may mean much from me but I liked them a lot)

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Stedmister

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@girlusocrazy tempted to but a share then sellout when merge happens, haha I be rich ;)

:

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GirlUSoCrazy

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@Stiler: Even then you still have to compromise with other board members unless you want to see it on the news about how large amounts of shares are being dumped and risk a lower overall price

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Moonco

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Moonco  Moderator

I invested $3.00 dollars in Ubisoft stocks. Hope my shares are enough to keep Vivendi from taking over the company

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GirlUSoCrazy

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@Moonco: Ubisoft share price is €27, how did you buy anything with $3?

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Moonco

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Moonco  Moderator

@girlusocrazy: I was joking (like always) lol

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GirlUSoCrazy

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Edited By GirlUSoCrazy

@Moonco: My bad

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Tekarukite

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Wow what terrible news. Stay strong Ubisoft! and Gameloft! Unity! Fraternity! Liberty!!!

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finaldasa

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Edited By finaldasa

Vivendi is now up to 14.9% of Ubisoft, not the 6.6% from last October, and are the largest, single, stock holder in Ubisoft. Source.

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gatsbythepig

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Ubisoft is french, right? They'll bend over and let Vivendi right in.

It'll be like storming the Bastille

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Jameson420

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@gatsbythepig: Yea but The Bastille is gone, I kinda like Ubisoft. Maybe compare it to Napoleon where they just exiled him..

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gatsbythepig

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@jameson420: Able was I ere I saw Elba -Ubisoft

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punksterdaddy

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Well that's the stock markets for you. Sorry this is happening but should Ubisoft be asking the Canadian Government for help with this? Is it the job of the tax payer to fix these issues? It feels like they want to make money for the shareholders and ride the stock market but yet do not want to sell shares, well if it worked that way, wouldn't every company do that?

This all sounds suspiciously like the bank crisis all over again, looking for bailouts just to stay afloat. I don't see why it is the problem of anybody but Ubisoft themselves, not the Canadian Government.

I'm sure it will have a knock on effect for us as gamers, so this is not good news.

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GirlUSoCrazy

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@punksterdaddy: Yeah that sounds completely against the ideals of capitalism. If you go bankrupt/get bought out/whatever it's for a reason. If you survive it's for a reason. The government is there to serve the people, and the people decide what survives in the market with their wallet. Investors decide when to best support a business.

If you let the government meddle in that you are just messing up natural economic forces.

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JeanHenry

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@girlusocrazy: @punksterdaddy:

Ubisoft will be asking the Canadian government for help because of the money they pump in to the local economy there. If they do get taken over and the Canadian studios closed it will cost the economy plus more with the high unemployment it'll also cause. As with everything, it's all about the money!

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GirlUSoCrazy

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Edited By GirlUSoCrazy

@JeanHenry: Canada should do more to worry about their dollar but yeah I see your point...

Still not like Vivendi would have much incentive to close up the Canada shop tho because they already have the talent there and tax breaks make it favorable, and with the low CDN dollar it would be cheaper for Vivendi to pay Canadian employees (and with a takeover they even have the right to let go a certain % of employees, such as people who reached salary caps and get new employees that will start at the bottom, obviously keep key employees though), I'm not sure that they would really want to pull out anyway but it's a risk

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punksterdaddy

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Edited By punksterdaddy

@girlusocrazy: @JeanHenry

Then what is the point of floating on the stock market if something like this happens, you just ask for the government to bail them out?

I'm sorry but I just do not think it is the responsibility of the government to bail out any company that does their business on Wall Street. Jobs or no jobs, some good could come out of it. A new studio forming for example.

I don't want to see this happen to Ubisoft but it is their bed and they have to lie in it. You can bet your arse that a local self employed business wouldn't get anything if this is how they did their business, why should they? Too big to fail? Nonsense, let them fail and the world will go on and adapt because if they get help in the form of tax dollars, then what is to stop any other company doing the same?

They want the best of both worlds, financial security and floating stocks. Nah nah, that's bang out of order.

BTW I appreciate the civil discussion over this. It gets tiring seeing the usual bickering in these comment sections.

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Stedmister

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@punksterdaddy It's the responsibility of the Government, you pay taxes, if a company goes under and you loose your job, the government pays you, until you run out, if they can keep people employed it is better for the economy than welfare is. Every election they talk about job creation and retention through tax breaks and loans, without that, alot more people would be out of work or working minimum pay jobs. It's basic economics.

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punksterdaddy

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@Stedmister: What are you talking about? This is Capitalism, not communism or socialism so why would any Government working the capitalist method have to do bail them out?

It is NOT the job of the Government to make sure you do not get a hostile takeover and it is not their job to sort it out if you do. If it were they'd all do it and with frequency, companies would be lining up to fold to make a quick buck for a select few rich folks out of it. How long do you think a country is going to last, if they keep bailing out every company that floats the stock markets and fails to keep a majority share?

Ubisoft is not a bank, they are not the be all and end all of economic survival, the only reason banks got these bailouts was down to it being the lesser of two evils, by bailing them out to save the countries in which they were housed. It's basic economics, after all.

When a small business and/or self employed man loses their businesses, do the government stump up the goods to prevent it from happening? No they do not, there is not a chance in hell of them ever doing it, at least not with some huge interest rate attached!

Ubisoft made their choices when they decided to enter the stock markets, so it is their risk weighed against their gains, so it is also their problem. If it means losing some jobs in your country then so be it, it is their own responsibilities.

It may lead to other opportunities opening up, that wouldn't perhaps have happened otherwise. The takeover doesn't automatically mean all doom and gloom ahead for everyone.

This is what happens when you insist on making money on stocks, it's a risky game, so I say sorry but too bad!

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JeanHenry

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@punksterdaddy: I don't see it so much as a bail out as Ubisoft are not in any financial trouble, it's all to sure up the company to keep it away from an unwanted takeover.

You're right though, it should not be down to the government to help. Ubisoft themselves should be buying back as many shares as they can and encouraging their loyal shareholders to do the same.

Like yourself I do not want to see this happen to Ubisoft. They get a lot of criticism, some warranted but not all. They make good games and not just AAA. I believe they were the first to release different games for different generations rather than the one game that did either console justice, plus have listened with regards to Assassins Creed and with new IP's still to announce their future could be good.

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GirlUSoCrazy

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@punksterdaddy: I tend to side with this view and I agree that the government shouldn't get more inolved, a new studio could spring up in its place if Vivendi did take this studio's presence from Canada, because of the government's present involvement in giving a favorable environment for a game studio.

I think they're just asking for this because they're grasping at straws. Is there an election coming up in Quebec? If so they may get lucky and this could play into a political campaign but right now I don't know if the government would be motivated to help out... Have they in the past there?

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NL_Skipper

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Edited By NL_Skipper

@girlusocrazy: No major elections coming up as far as I'm aware, the entire country just had a federal election a few months ago, but Quebec often does their own thing so I'm not entirely sure what their political climate is like right now. It doesn't seem like the kind of issue that'd play a big role in any kind of elections though to be honest.

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punksterdaddy

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@girlusocrazy:

I honestly couldn't tell you I'm Scottish/British. Local elections is what I think you meant but I have no idea sorry. I know they just elected a new Prime Minister last year with Justin Trudeau (or however it is spelled,) but that's as far as my Canadian Political knowledge stretches.

I understand the need for asking for help but I firmly believe that they should not get it.

I know nothing of this Vivendi that wants to buy them out, why are people saying they are the worst? Do they have a long history of breaking up companies or something, is that the sort of business that they do there?

Scary times for sure at Ubisoft right now.

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Hagan

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a sh!t and a turd fighting over the same toilet bowl.

Last Ubisoft game I bought was Watch Dogs, which was "meh." Was going to buy The Division, but I think I am just going to wait until Overwatch comes out and sink my time into that. Still actively playing FO4 and HOTS so I don't need a new game ATM.

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