Investment firms may be eyeing Ubisoft for a takeover

Rumor mill: With all the recent news about game studio acquisitions, it’s probably not surprising to hear that Ubisoft is being considered for a possible takeover. However, most likely, these will not be the usual suspects – Microsoft or Sony. The two main shareholders are mega-conglomerate Blackstone and investment company KKR. Other unnamed firms are also eyeing the publisher.

Assassin’s Creed publisher Ubisoft Entertainment is reportedly attracting the attention of private equity firms Blackstone Inc, KKR & Co and others. Bloomberg sources say with knowledge that firms analyzed prospects, but did not commit to carry out a buyout.

Ubisoft co-founder and chairman Yves Guillemot and his family are the majority shareholders of the company with a collective stake of 15%. The French game maker’s shares have fallen nearly 45 percent over the past year, and the company’s market capitalization is 4.64 billion euros ($5.05 billion).

While the company appears to be ripe for a choice, investors are deliberating very early and unsure whether to continue making offers. It’s also not entirely clear if Ubisoft wants to see her taken. Guillemot and other top managers did not answer this question and kept their cards to themselves.

French media giant Vivendi has been making a slow hostile takeover of Ubisoft for years. In 2017, Vivendi was poised to pounce on a 26 percent stake. However, the surge in valuation froze the conglomerate’s plans, dashing takeover hopes for at least six months.

Eleven months later, Vivendi announced that it was divesting all Ubisoft shares due to a three-year growth spurt in which the share price rose over 400 percent. That too was a good move as the stock fell more than 64 percent, dropping from $24.10 a share in July 2018 to its current price of $8.62. The sharp drop makes Ubisoft’s buyout price attractive to investors, while an infusion of fresh capital could be enough to get the publisher back on track. Win-win.

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