A Reuters report (opens in new tab) says Tencent, China’s largest tech firm and an absolute gaming behemoth, has its sights set on Ubisoft. Tencent already has a 5% stake in Ubisoft, acquired in 2018, and is seemingly trying to gobble up a number of the 16% stake held by the Guillemot household, who co-founded and nonetheless run the enterprise. Tencent’s purpose is to develop into the only largest shareholder within the writer.
Ubisoft is at present valued at round $5.3 billion, and Tencent is trying to purchase at a worth of $101.84 per share (its 2018 stake was purchased at roughly $67 {dollars} per share). This can be a large supply: Ubisoft’s inventory worth has averaged round $45 per share up to now this 12 months, whereas its highest-ever valuation was round $110 in 2018.
80% of Ubisoft is publicly owned, and Tencent can also be trying to purchase shares from elsewhere in addition to the Guillemots. With a proposal worth like that, it in all probability will not be arduous.
Ubisoft shares went up 15% following Reuters report about Tencent, which actually exhibits that shareholders just like the sound of cash, whereas the Guillemot household firm (which holds their shares) additionally rose 7% in worth. It is unclear how far alongside any projected deal is, with Reuters’ sources (opens in new tab) saying no deal is finalised, although Tencent executives met the Guillemots in Might and have submitted a proposal with the corporate’s excessive worth.
Neither Tencent nor Ubisoft has commented on the report. One insider did say: “Tencent could be very decided to nail down the deal as Ubisoft is such an necessary strategic asset for Tencent”.
Tencent’s holdings are legion and, whereas China is in the midst of a giant tech crackdown (opens in new tab), it is trying to improve its worldwide attraction. It already has stakes within the likes of Epic Video games, Riot, Supercell, and Frontier, whereas outright buying studios together with Sumo, Turtle Rock, Playtonic, and Digital Extremes. It is truly fairly dizzying simply how much of the gaming industry Tencent owns (opens in new tab).
This isn’t a carried out deal: the Guillemot household has beforehand proven it needs to retain management of Ubisoft, and most notably fought off a takeover from Vivendi (which ultimately offered all of its acquired shares again to the writer). The Guillemots managed to battle Vivendi off on the time because of investments from, amongst others, Tencent: oops!
