Oct 07, 2024 15:00:00

Ubisoft shares surge over 30% as reports emerge of the company considering selling to China's Tencent

By

Tim Bartel

It has been reported that the founding family of Ubisoft, a major French game company whose stock price has been sluggish due to the backlash and delays to the sequel to its flagship title 'Assassin's Creed' series, is in talks with Tencent, a Chinese IT giant, with a view to acquiring Ubisoft. As a result, Ubisoft's stock price, which had been halved in the past year, temporarily rose by 33%.

Tencent, Guillemot Family Are Said to Consider Buyout of Ubisoft - Bloomberg
https://www.bloomberg.com/news/articles/2024-10-04/tencent-guillemot-family-are-said-to-consider-buyout-of-ubisoft

Ubisoft shares skyrocket after report Tencent, Guillemot family considering buyout
https://www.cnbc.com/2024/10/04/ubisoft-shares-skyrocket-after-report-tencent-guillemot-family-considering-buyout.html

Bloomberg reported on October 4, 2024 that Ubisoft founder and CEO Yves Guillemot was considering options, including an acquisition of Ubisoft by Tencent through holding company Guillemot Brothers.

The discussions with the advisers also include partnering to take Ubisoft private, according to people familiar with the matter. The company's annual report showed that as of the end of April 2024, Tencent held 9.2% of Ubisoft's net voting power, while the Guillemot family held about 20.5%.

Following the news, Ubisoft's shares rose 33% on the French stock market, the biggest increase since the company went public in 1996.

Ubisoft is one of Europe's leading game companies, but its future is uncertain due to the poor performance of its major

games and investor distrust in its management structure. In September 2024, the company announced that it would postpone the release of Assassin's Creed: Shadows by three months from November 15, 2024 to February 14, 2025, following lower-than-expected sales of Star Wars: Outlaws, released in August. This made it impossible to launch the game in time for the holiday season.

Ubisoft also lowered its outlook for net bookings for fiscal 2025 to approximately 1.95 billion euros (approximately 318 billion yen), about 15% lower than the 2.32 billion euros (approximately 378 billion yen) forecast for fiscal 2024.

by Linda Rain 714

Investors have become increasingly frustrated by this poor management, and in September 2024, activist investor AJ Investments announced that it had secured the support of 10% of shareholders for a proposal calling for the sale of Ubisoft.

Spokespeople for Ubisoft and Guillemot Brothers declined to comment when contacted by Bloomberg, while a representative for Tencent was on vacation and did not immediately respond to a request for comment.