Tencent Holdings and the founding Guillemot family of Ubisoft Entertainment SA are exploring various options, including a potential buyout of the French video game developer, following a dramatic decrease in its market value this year, according to sources familiar with the discussions.
Discussions between the Chinese tech giant and the Guillemot brothers have included consultations with advisers to explore strategies aimed at stabilizing Ubisoft and enhancing its market position. Among the options being evaluated is a collaboration that could lead to taking the company private.
On Friday, Ubisoft’s stock surged as much as 33 percent in Paris—marking the most significant jump since the company went public in 1996—following a report by Bloomberg News.
Despite the recent increase, Ubisoft shares have plummeted nearly 40 percent this year, bringing the company’s market capitalization to approximately EUR 1.8 billion (around Rs. 16,577 crore). As of late April, Tencent held 9.2 percent of Ubisoft’s net voting rights, while the Guillemot family owned about 20.5 percent, as indicated in the company’s most recent annual report.
Some minority shareholders, including AJ Investments, have been advocating for either a buyout or a sale to a strategic investor given the recent decline in stock prices. The current discussions are reportedly in the early stages, and there is no guarantee they will culminate in a deal. Tencent and the Guillemot family are also considering alternative strategies.
Representatives for Ubisoft and the Guillemot family did not provide comments on the matter. A Tencent representative was unavailable for immediate comment due to a holiday week in China.
Last month, Ubisoft’s shares reached their lowest point in over a decade after the company revised its forecasts due to lower-than-expected sales and delayed the much-anticipated release of Assassin’s Creed Shadows. The video game developer has faced ongoing challenges in recent years, including a production crunch during the pandemic that led to delays and the cancellation of several titles.
In 2022, several private equity firms, including Blackstone Inc. and KKR & Co., were reportedly considering potential bids for Ubisoft amid a wave of large transactions in the video game sector. Later that same year, the Guillemot family collaborated with Tencent, which acquired a 49.9 percent stake in the Guillemot Brothers holding company, in addition to its direct investment in Ubisoft.
This arrangement was viewed by analysts as a means of deterring potential buyers while allowing the Guillemot brothers to maintain control over Ubisoft’s governance. Tencent’s stake was capped at less than 10 percent, with no operational veto rights. Furthermore, Tencent is prohibited from selling its shares in Ubisoft for five years, after which the Guillemot family will have first right of refusal. Yves Guillemot, Chairman and CEO of Ubisoft, noted in a past interview that this agreement still permits the Guillemot brothers to negotiate and collaborate with any interested parties.
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