Tencent and Guillemot Family Consider Ubisoft Buyout Options

Potential Buyout Considerations

Tencent Holdings and the Guillemot family, the founding body of Ubisoft, are exploring options including a possible buyout of the French video game developer. Following a staggering loss of over half its market value this year, they are engaging advisers to stabilize and enhance Ubisoft’s financial health.

Market Response and Current Valuation

Share prices of Ubisoft surged up to 33 percent in Paris after reports emerged about potential buyout discussions, marking the most substantial increase since the company's IPO in 1996. However, Ubisoft's shares have seen a significant decline of roughly 40% this year, resulting in a market capitalization of around EUR 1.8 billion.

Potential Partners and Strategic Discussions

• Tencent currently holds 9.2 percent of Ubisoft's net voting rights.
• The Guillemot family maintains approximately 20.5 percent.
• Minority shareholders are advocating for a strategic sell or a take-private deal due to the declining stock price.

Discussions regarding these options are in their infancy, and no definitive deal is assured.

Challenges Facing Ubisoft

Recent financial difficulties, coupled with new game launch delays, have weakened Ubisoft’s market standing. Last month, shares plummeted to a decade-low following a forecast cut due to lackluster sales.

Notably, in 2022, several private equity firms expressed interest in bidding on Ubisoft amid numerous industry acquisitions. Analysts reflected that Tencent's earlier investment had positioned the Guillemot family to retain overall control while allowing collaboration with other parties.