After spending years accruing Ubisoft shares in what appeared to be preparation for a hostile takeover attempt, French media conglomerate Vivendi have thrown in the towel, selling their entire 27.3% stake in Ubisoft for $2.4 billion USD.
The possibility of a Vivendi-led takeover attempt has been a cloud over Ubisoft’s head for years and was a source of open irritation for company president Yves Guillemot. Guillemot spent years and a considerable amount of his family’s own money to keep Ubi from Vivendi’s clutches, denying them the room they needed to commence a takeover bid despite their holding a far larger share in the company than any other entity. Guillemot’s concerns were not without precedent. Before turning their attention to Ubisoft, Vivendi previously claimed another Guillemot-owned company in a similar takeover, mobile developer Gameloft, in a hostile takeover.
It’s a war of attrition that Guillemot appears to have won, however. With the sale of Vivendi’s entire 27.3% stake in Ubisoft, and the agreement that Vivendi will purchase no further Ubisoft shares in the next five years, the door has been opened for new long term investors to step in — and they have. The first is Ontario Teachers’ Pension Plan, a group oversees payment of pensions to just under 320,000 teachers in the Canadian province. They are taking up a 3.4% share in Ubisoft. The second is Chinese conglomerate Tencent who are already a major figure in the video games industry — both Fortnite developer Epic Games and League of Legends developer Riot Games rank among its subsidiaries. Tencent are taking on a 5% share.
Unsurprisingly, the new agreement will get neither company a seat on Ubisoft’s board of directors. The terms of the agreement also prevent Tencent from transferring its share in the company or increasing its ownership stake or voting rights. This is a preventative measure from Ubisoft who are clearly looking to keep hostile takeover attempts off the table for good.
For their part, Ubisoft are buying back as many as 8.1% of its own shares from Vivendi over the next three years. Guillemot Brothers SE, representing the Guillemot family, will purchase 2.7% of Ubisoft from Vivendi in a cash transaction taking Guillemot Brothers SE’s stake in Ubi to 15.6% in total.
That’s a lot of numbers, I know. The takeaway is that Ubisoft is now entirely its own master again, able to execute on its release strategies and develop games without having to watch their back for corporate takeover attempts if any of them should bomb.
Congrats, Ubi. Big day.