Tencent takes 49.9% of the capital and 5% of the rights of the holding company of the Guillemot family. If the operation allows Ubisoft to sweep away takeover rumours, it was poorly received on the Paris Stock Exchange. The title of the publisher is in freefall.
Tencent is increasing its stake in Ubisoft, but is not yet the majority shareholder of the largest French video game studio. Indeed, the Chinese giant will invest 300 million euros in the holding company of the Guillemot family, which still controls Ubisoft with 13.6% of the capital and 17.6% of the voting rights.
This operation will allow the Chinese firm to seize 49.9% of the capital and 5% of the voting rights of Guillemot Brothers Limited and – important nuance – not of the publisher ofAssassin’s Creed. Together, Tencent and the Guillemot family now hold 19.8% of the capital and 24.9% of the voting rights of Ubisoft.
Tencent limited to 9.99% of Ubisoft’s capital for 8 years
To maintain its stranglehold on Ubisoft, the Guillemot siblings have ensured that Tencent does not have a seat on the board of directors, nor a right of approval or operational veto. And if the Chinese giant can increase its stake in Ubisoft to 9.99% of the capital and voting rights, against 4.5% at present, it will not be able to cross this threshold for eight years. In addition, Tencent cannot resell its Ubisoft shares for five years, a period after which the Guillemot brothers would have priority to buy them back if necessary.
While this investment allows the Guillemot family to acquire greater financial resources, the announcement of this operation was poorly received by the markets. The title of the French publisher thus fell by more than 13% on the Paris Stock Exchange, at 10:30 a.m. this Wednesday, September 7. But the infernal spiral does not seem to be over, with Ubisoft’s stock continuing to plummet minute by minute. This is obviously the price to pay to dismiss rumors of a takeover of the studio, while the video game industry is firmly committed to the path of consolidation.