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[Update] Report Suggests Gameloft CEO Guillemot Considering Resignation
Update: With a hostile takeover in progress, Vivendi is poised to take complete control of mobile game publisher Gameloft. The company, founded by the Guillemot family (which also founded and is in control of Ubisoft), may be bowing out of Gameloft entirely.
A Bloomberg report suggests that chairman and CEO Michel Guillemot is likely to resign. The family will likely consolidate its efforts on protecting Ubisoft from Vivendi takeover.
Ubisoft has been courting investors to shore up its hold on the company. The Guillemots control approximately 15 percent of voting shares. Vivendi controls about that amount with more than 17 percent of capital under its control.
Original Story (June 1, 2016 @ 12:46 p.m. Central):
Over the weekend, we reported that Vivendi is tightening its grip on mobile game publisher Gameloft. Yesterday, an open letter was published welcoming employees and explaining the justification for the hostile takeover.
The letter, signed by CEO Arnaud de Puyfontaine and chief operating officer Stéphane Roussel, suggests that Gameloft is unable to grow without Vivendi’s backing. “You work for a company that is already one of the most renowned and creative in the mobile games segment worldwide,” Vivendi writes. “We are convinced that Gameloft, with Vivendi's backing, can be more ambitious in its growth plans. In a rapidly-evolving market, your company, which needs industrial and financial backing to develop, will be able to count on our full support and commitment.”
According to a Wall Street Journal article published on May 31, Vivendi now controls 61.7 percent of Gameloft’s capital. That majority allows it to control the company via shareholder voting on board representation and executive appointment.
With Gameloft all but acquired at this point, Vivendi will likely set its sights on further creeping control of Ubisoft. The Assassin’s Creed publisher was also founded by the Guillemot family.
Vivendi, which is in large part bankrolled by the $8 billion Activision buyout in 2013, has been slowly acquiring Ubisoft stock. As of today, Vivendi controls 17.73 percent of Ubisoft capital and 15.66 percent of voting shares.
Final results of the shares purchased in Vivendi's offer will be posted no later than June 2.
[Source: Vivendi]
Our Take
Vivendi’s letter paints the company as a savior without which Gameloft would fade away. That is likely an exaggeration, but Gameloft has been facing net losses for the past two years. This likely made the company a ripe target. Ubisoft will be a tougher mark with strong sales, operating income, and profits. This raises the share value and keeps investors happy (and less likely to sell).
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