Reuters reports today that Tencent is determined to raise its current 5% stake in French game developer and publisher Ubisoft, intending to eventually become the single largest shareholder of the whole company.
A part of the stake purchased would be grabbed directly from the Guillemot family, which currently holds 15% of Ubisoft. Reuters says that Tencent representatives flew to France in May to meet the Guillemots, offering them a non-binding offer describing the investment's basic terms and conditions. The pricing is extremely attractive for the Guillemots, offering roughly €100 per stake with a premium of 127% over the average €44 Ubisoft stock traded in the last few months.
Needless to say, this sent Ubisoft shares up +15% (€48), and even Guillemot Corp SA, Guillemots' holding company, is trading at +8,58% right now (€13,92).
Given the less than ideal domestic situation in China (the publisher has not received new game licenses from the Chinese government in over a year), Tencent has increasingly invested in Western game companies. Tencent already owns Funcom, Leyou, Riot Games, Sharkmob, Sumo, Turtle Rock Studios, Wake Up Interactive, Inflexion Games, Grinding Gear Games, Fatshark, Klei Entertainment, 10 Chambers Collective, Stunlock Studios, and Yager Interactive. It also holds minority stakes and/or strategic investments in Epic Games, Garena, Dontnod, Bloober, Marvelous, Netmarble, Kakao, Bluehole, Frontier, Kadokawa Corporation, Activision Blizzard, Paradox Interactive, Remedy, Playtonic, and PlatinumGames.
For its part, Ubisoft (currently valued at around $5.3 billion) has been in the rumor mill as the potential target for the next big acquisition in the games industry after the likes of Microsoft/Activision Blizzard, Take-Two/Zynga, and Sony/Bungie. The renowned publisher has faced some tough times following delays, cancellations, and increasing costs.
Most recently, during the latest quarterly financials, Ubisoft reported a 10% decreased revenue on a year-over-year basis and announced the cancellation of Splinter Cell VR, Ghost Recon: Frontline, and two unannounced projects. It also delayed an unannounced premium game, believed to be Assassin's Creed Rift, to 2023.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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