Ubisoft shares surge on report of potential Tencent joint buyout
PARIS — Shares of French video game publisher Ubisoft surged by around 30 percent on Friday after a media report suggested China’s Tencent was poised to join a potential buyout.
Bloomberg reported that the Chinese giant was considering a joint move with the Guillemot family, which founded Ubisoft and is still the main shareholder, after the French company lost half its market value this year.
Ubisoft has faced several years of turbulence after allegations of pervasive sexism, discrimination and workplace harassment began to emerge in 2020 and led to the departure of several top executives.
The French firm, best known for creating “Assassin’s Creed” and “Far Cry”, has also postponed several releases and endured an underwhelming response to its “Skull and Bones” pirate role-play game.
Tencent, the world’s biggest game maker, already holds nearly 10 percent of Ubisoft’s capital, while the Guillemot family owns around 15 percent.
Bloomberg reported that Tencent and the Guillemot family were now exploring several options, including a buyout that would take Ubisoft off the stock market.
Contacted by AFP, Ubisoft said they had no comment on the Bloomberg story and Tencent did not immediately respond.
‘Higher performing model’
Ubisoft this year added to its longer-term malaise by posting disappointing returns for its latest blockbuster game “Star Wars Outlaws.”
The firm said initial sales of the game were “softer than expected” in a statement in September, forcing it to revise its financial targets downwards.
The firm also announced the release of “Assassin’s Creed Shadows,” the next game in its flagship series that the firm was banking on to revive its fortunes, would be postponed by several months to allow its teams to “polish” the game.
“Our second-quarter performance fell short of our expectations, prompting us to address this swiftly and firmly,” CEO Yves Guillemot said in the same September statement.
The company is also under pressure from some of its shareholders.
At the start of September, Slovakian investment fund AJ Investments, which owns less than one percent of Ubisoft’s shares, published an open letter expressing “deep dissatisfaction” with the management of the Guillemot family.
The fund called for the firm to open itself to an acquisition.
“In the light of recent challenges, we acknowledge the need for greater efficiency while delighting players,” said Yves Guillemot in September, announcing an internal review that would lead to “higher performing model” for shareholders.
Several unions have also called for a strike on Oct. 15 at Ubisoft’s French studios to protest against a return to in-office work that they consider “forced.”
Video games boomed during the lockdowns caused by the Covid pandemic.
But as people returned to offices and schools reopened, interest in them dried up.
Some smaller firms have been forced out of business, others into mergers, and several waves of cost-cutting have put thousands out of work.
