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Ubisoft Avoids Vivendi Takeover

by Joey Thurmond on Mar 20, 2018 at 02:22 PM

The saga of multimedia conglomerate Vivendi's encroaching influence over Ubisoft has only grown over the past two years. In the end, it was announced today that Vivendi will be backing away by relinquishing its 27.3 percent stake in Ubisoft. 

Guillemot mentioned in 2016 to CNBC how he would consider a merger with another company to keep Vivendi at bay, and his wishes have come true two years later in a lesser sense. The Chinese conglomerate Tencent has forged an alliance with Ubisoft to stake 5 percent of its capital in its shares with the agreement that it will not pursue further investments or any voting rights in Ubisoft. However, Tencent will still benefit from the partnership.

"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, " Guillemot said. "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."

In addition, the Ontario Teachers' Pension Plan will become long-term investers in Ubisoft with 3.4 percent of its capital. Ubisoft will be buying back 8.1 percent of its own shares over the next four years through a buyback program, and the Guillemot family will personally invest in 2.7 percent capital.

Vivendi had already taken control of Ubisoft-founded publisher Gameloft, which was widely seen as a step towards acquiring Ubisoft. Vivendi has since slowly increased its stake and voting rights in Ubisoft to over 25 percent, and according to French law, 30 percent is when a takeover bid must be proposed. If Vivendi should act upon it, it would rule Ubisoft's board and force out its current leadership, which could result in unprecedented structural changes and shakeups for all of Ubisoft's developers. The French publisher has been adamant in its derision toward Vivendi's intrusion, and CEO Yves Guillemot's family business has personally staved this off in buying back shares in its own company, which bought Ubisoft the time to fend for itself in November for six more months. 

If you'd like a succinct summary of the drama, former news editor Mike Futter compiled a useful list of everything you need to know about Vivendi's past, what "hostile takeovers" in business are like, and more.

[Source: Nasdaq]


Our Take
Ubisoft has shown exemplary post-launch support for its AAA titles and a better grasp on handling its IPs in recent years, so the potential of seeing that progress wiped away with a Vivendi takeover has been stressful to watch over time as Ubisoft seemed to be holding off the inevitable.