Ubisoft Founders Fight Tencent for Company Control

Ubisoft Founders Fight Tencent for Company Control

The Guillemot family, Ubisoft’s founders and largest shareholders, are seeking funding to secure the company’s financial future while maintaining control. They’re in talks with Tencent and other financial partners for a management-led buyout.

A Power Struggle for Control

A key sticking point is control. Tencent desires a greater say in future board decisions in exchange for investment, potentially hindering the Guillemot family’s desire to retain leadership. There’s a possibility Tencent may not invest further.

Preventing a Hostile Takeover

Tencent’s involvement is partly motivated by preventing another hostile takeover attempt, similar to Vivendi’s unsuccessful 2017 bid. Tencent currently owns nearly 10% of Ubisoft stock, while the Guillemot family holds 15%.

Ubisoft’s Response and Recent Challenges

Ubisoft stated they are committed to acting in the best interest of stakeholders and are reviewing strategic options. Recent events, including the shutdown of XDefiant, studio closures, and the underperformance of Star Wars Outlaws, have contributed to the current situation. These events prompted a memo from CEO Yves Guillemot emphasizing maintaining control.

Previous Discussions and Shareholder Pressure

Discussions between Ubisoft and Tencent regarding various options, including a full buyout, have been ongoing. A minority shareholder, AJ Investments, urged Ubisoft to go private and change its strategy.

Ubisoft’s share price has experienced significant fluctuations recently. While it saw a surge following the Reuters report, it remains considerably lower than in previous years.