Tencent is determined to increase its current 5% stake in game developer and publisher Ubisoft, aiming to become the largest shareholder.
A portion of the shares Ubisoft purchased will be purchased directly from the Guillemot family, which currently holds 15% of Ubisoft’s shares. Reuters recently reported that Tencent representatives flew to France to meet Guillemots, making a non-binding offer describing the basic terms and conditions of the investment.
The deal is extremely attractive to Guillemots as it is likely to pay around £100 per share at a premium of 127% against the average Ubisoft value of £44 per share traded during the year. past few months.
This has sent shares of Ubisoft up 15%, and even Guillemot Corp SA, the parent company of Guillemots, is trading at +8.58%.
With the difficult domestic situation for games in China, where the publisher has not been licensed new games from the government for more than a year, Tencent is increasingly investing in Western game companies.
Tencent đã sở hữu Funcom, Leyou, Riot Games, Sharkmob, Sumo, Turtle Rock Studios, Wake Up Interactive, Inflexion Games, Grinding Gear Games, Fatshark, Klei Entertainment, 10 Chambers Collective, Stunlock Studios và Yager Interactive.
It also holds a minority stake or makes strategic investments in Epic Games, Garena, Dontnod, Bloober, Marvelous, Netmarble, Kakao, Bluehole, Frontier, Kadokawa Corporation, Activision Blizzard, Paradox Interactive, Remedy, Playtonic and PlatinumGames.
For its part, Ubisoft (currently valued at around $5.3 billion) is seen as a potential target for the next major acquisition in the gaming industry after the likes of Microsoft/Activision Blizzard, Take-Two / Zynga and Sony / Bungie. The French game publisher has faced some tough times following the rising costs of making games.
Most recently, in its latest quarterly financial report, Ubisoft reported a 10% drop in revenue year-over-year and announced the cancellation of Splinter Cell VR, Ghost Recon: Frontline, and two unannounced projects. The studio also delayed an unannounced premium game, supposedly Assassin’s Creed Rift, to 2023.
Previously, in April, a report confirmed that Ubisoft was being offered by a private equity company. At the time, it was reported that private companies including Blackstone Inc. and KKR & Co. is actively discussing the acquisition of Ubisoft, and several current and former developers at the company later believe it will be sold.
Months went by with no word of these talks with private equity firms. It is possible that negotiations between the parties have broken down, or Ubisoft has decided on a different path, one that likely involves Tencent. We’ll have to wait a little longer to see who takes control of Ubisoft from Guillemot.