Ubisoft Is Safe: Following Takeover Concerns, Vivendi Will Sell Off Its Stock
Tencent now owns a part of Ubisoft.
In recent years, French media conglomerate Vivendi has acquired more and more stock in Ubisoft, fueling concerns that the company would eventually attempt a hostile takeover of the games publisher. Ubisoft and CEO Yves Guillemot have made it clear they oppose the moves, and now they've gotten precisely what they were seeking--a complete sell-off of Vivendi's Ubisoft stock.
The news was shared today, with Ubisoft saying it has reached an agreement for Vivendi to sell its entire stake in the publisher. The shares being sold will go to multiple sources; the Guillemot brothers will acquire some, Ubisoft will initiate a buy-back for some, and the company will get two new "long-term investors:" the Ontario Teachers' Pension Plan and Tencent. The latter is the massive Chinese company that also owns stakes in a variety of game companies, including Fortnite maker Epic. This acquisition by Tencent (which amounts to 5% of the company) is part of a new partnership meant to "significantly accelerate the reach of Ubisoft franchises in China in the coming years," according to a press release.
"The evolution in our shareholding is great news for Ubisoft," Guillemot said in a statement. "It was made possible thanks to the outstanding execution of our strategy and the decisive support of Ubisoft talents, players and shareholders. I would like to warmly thank them all. The investment from new long-term shareholders in Ubisoft demonstrates their trust in our future value creation potential, and Ubisoft's share buy-back will be accretive to all shareholders. Finally, the new strategic partnership agreement we signed will enable Ubisoft to accelerate its development in China in the coming years and fully leverage a market with great potential."
"Today, Ubisoft is fully reaping the benefits of our long-term strategy and the successful transformation towards a more recurring and profitable business. Ubisoft is perfectly positioned to capture the numerous video game growth drivers in the coming years. We are focused more than ever on delivering on our strategic plan."
Vivendi said on more than one occasion that it did not plan a hostile takeover of Ubisoft, at least on a short-term basis. In November, it announced that it didn't intend to make such a move in the next six months--a window that was coming up in the near future. Despite this, Vivendi's 27.3% stake in the company meant it was approaching a threshold where it would be legally required to pursue a controlling interest in the company.
Vivendi had caused some issues for Ubisoft, particularly during an annual shareholders meeting where its non-vote caused certain measure to not pass. Meanwhile, Guillemot and company made moves to preserve the company's independence, which he argued was essential to its success. During all of this, Vivendi took control of French mobile game company Gameloft, which like Ubisoft was led by the Guillemot family.
It's no secret that Ubisoft wanted Vivendi out of the picture. Guillemot argued that Vivendi threatened Ubisoft's ability to innovate and be agile--a convincing argument given how successful the publisher has been in recent years. With Vivendi out of the way, one hurdle is out of the way for the company.
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