March 21, 2018 // 10:14 a.m.
Media giant Vivendi has pulled out of a years-long hostile takeover attempt of Ubisoft, selling up the 27.3 percent of the company it had managed to acquire.
Vivendi was once a major player in the gaming industry: Born form Compagnie Générale des Eaux, founded by Napoleonic decree in 1853 to supply water to the city of Lyon, the company built up an impressive range of subsidiaries including Diablo, WarCraft, and Starcraft creator Blizzard and point-and-click pioneer Sierra before merging with Activision and creating Activision Blizzard in 2007. The company would split from Vivendi, however, in 2013, and today Vivendi owns no stock in Activision Blizzard - and has been working over the years to get back into the gaming game.
Vivendi made its intentions clear when it began buying up stock in Ubisoft, starting in 2015, which Ubisoft chief Yves Guillemot correctly interpreted as the beginnings of a hostile takeover attempt. Claiming such a takeover would leave Ubisoft 'managed by people who don't understand our expertise and what it takes to succeed in this industry', Guillemot has been unsuccessfully fighting Vivendi while the company increased its share of Ubisoft from an initial 6.6 percent to just shy of the 30 percent that would trigger a takeover under French law by November 2017.
Now, though, Vivendi is abandoning its takeover attempt, reaching an agreement with Ubisoft to sell its entire stake in the company - amounting to 27.3 percent - with capital provided by Chinese investment giant Tencent Holdings and the Ontario Teachers' Pension Plan who acquire shares valued at 5 percent and 3.4 percent of the capital respectively with Ubisoft itself, Guillemot Brothers SE, and a sale to institutional investors via Accelerated Bookbuilding taking the remaining shares at 8.1 percent, 2.7 percent, and 8 percent respectively. The deal will also see Ubisoft partner with Tencent, which holds considerable investments in the Chinese gaming industry, to push Ubisoft in the region.
'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,' claims Guillemot of the deal. '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. 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. Today, Ubisoft is fully reaping the benefits of our long-term strategy and the successful transformation towards a more recurring and profitable business. Ubisoft is perfectly positioned to capture the numerous video game growth drivers in the coming years. We are focused more than ever on delivering on our strategic plan.'
Vivendi has confirmed the deal, but its executives have offered no comment on the matter beyond confirmation that it has undertaken to acquire no shares in Ubisoft for a period of five years from the date of the agreement.