Ubisoft Buyout Talks

By Amy-Jo Crowley and Julie Zhu

LONDON/HONG KONG (Reuters) – Shareholders of Ubisoft Entertainment SA are considering structuring a possible buyout of the Assassin's Creed video game maker while maintaining the founding family's control.

The Guillemot family, the largest and founding shareholders, has been in discussions with Tencent and other investors about funding a management-led buyout, but they wish to retain control of the company that develops popular titles like Just Dance, Far Cry, and Tom Clancy's series.

Tencent, the second-largest shareholder, has yet to decide whether to participate in the potential buyout and increase its stake, wanting more influence in board decisions, particularly regarding cash flow distribution.

Negotiations are ongoing as Tencent seeks to protect against possible hostile takeovers by other investors, but it may choose not to increase its stake, deeming its current 10% ownership sufficient for cooperation with Ubisoft.

Ubisoft remains committed to the best interests of its stakeholders and is exploring all strategic options. Recently, Ubisoft shares rose significantly following reports of the buyout talks.

The talks come amid pressure from minority shareholders advocating for a private buyout or sale after a significant stock price decline due to weaker sales forecasts and delays in game launches. The company's shares hit a decade-low in September and faced additional setbacks with recent announcements about discontinuing certain projects and closing studios.

The Guillemot family controls about 15% of Ubisoft, while Tencent owns just under 10%. As of the latest annual report, the family held approximately 20.5% of voting rights, compared to Tencent's 9.2%.