Ubisoft is free from the clutches of Vivendi, the french media conglomerate behind Universal Music Group and Dailymotion. Ever since they started buying up shares in the video game company in 2015, there had been lingering speculation of a hostile takeover. This was the same strategy employed by Vivendi in the takeover of Gameloft in 2016, with increasing stake in the company followed by a hostile takeover bid within a year. Gameloft was created by a co-founder of Ubisoft, Michel Guillemot, who later regretted the decision to sell over the company. Analysts later predicted that Gameloft’s takeover was but a step towards Ubisoft.
The Ubisoft-Vivendi Deal
Vivendi holds a 27.27% stake in the company, amounting to 30.5 million shares. This makes them the largest stakeholder in the company. To prevent further further acquisitions, Ubisoft and Vivendi have reached a deal, which also involves the Chinese MNC Tencent Inc. According to the deal, Vivendi will sell off all its shares for €2 billion, almost twice the amount they spent purchasing it (€794 million over the period of 3 years). This was confirmed through Vivendi’s press release. Also, the terms state that Vivendi cannot acquire any Ubisoft stock for the next five years.
The deal was successful, in part due to the large profit for Vivendi. But a major benefit for Ubisoft would be the deal with Tencent, which would help them market some of their high profile games in China. Tencent had recently acquired rights to distribute the massive hit, Playerunknown Battlegrounds in China. Thus far, they recently launched a PUBG mobile version of the game for Android and iOS. The agreement also prevents Tencent from transferring or increasing their stake in Ubisoft, to prevent a similar situation from arising.
Ubisoft has been ecstatic about the deal, and the Guillemot brothers will still be in charge. Yves Guillemot, CEO and Co-Founder said “The evolution in our shareholding is great news for Ubisoft. 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.” Ubisoft has also confirmed their financial targets for 2017-2018 and 2018-2019 fiscal years.
Distribution Of Vivendi’s Shares
Vivendi’s stake is being distributed to multiple parties, with Ubisoft buying back 8.1% progressively from 2019 to 2021. Guillemot Brothers SE, the firm representing the founders, will also be buying back 2.7% of shares, taking their total stake to 15.6%.
Tencent and Ontario Teachers’ Pension Plan were brought in as “long term investors” with major stakes in the company. Ontario Teachers’ Pension Plan is an independent organization that administers pensions for about 318,000 teachers. Tencent has committed to acquire 5% of shares (roughly 5.6 million shares), while the OTPP will be acquiring 3.4%. The rest of the shares will be sold through accelerated bookbuilding to institutional investors.
For further details, you can read the agreement details shared by Ubisoft, here.