Tencent Seeks Greater Influence Over Ubisoft Amid Privatization Talks
In October, reports came forward stating that the Chinese tech giant, Tencent—currently holding around a 10% stake in Ubisoft—had been collaborating with Guillemot Brothers Ltd to explore strategies to stabilize the company.
Ubisoft has faced a challenging year, with its market value plummeting by over 50%. One option under consideration was a partnership between Tencent and the Guillemot family to privatize Ubisoft, though these talks were said to be in early stages.
Now, a new report from Reuters indicates that Ubisoft shareholders are actively deliberating the structure of a potential buyout while seeking to preserve the Guillemot family’s control over the company.
Importance: Ubisoft is widely regarded as a key player in the gaming industry, but its current struggles have marked one of its lowest points. This highlights the need for decisive action to steer the developer back on track.
Tencent has reportedly shown hesitation about increasing its stake in Ubisoft due to its demand for a greater influence on board decisions. The company is also said to be focused on preventing other investors from executing a hostile takeover.
Ubisoft, responding to the ongoing speculation, stated:
“We remain committed to making decisions in the best interests of all of our stakeholders. In this context, as we have already indicated, the company is also reviewing all its strategic options.”
The backdrop to these developments includes a significant decline in Ubisoft’s share price, which fell to an 11-year low in September. This drop followed the delay of Assassin’s Creed Shadows and a lackluster launch for Star Wars Outlaws. Earlier that month, a minority investor urged Ubisoft’s management to either take the company private or sell it to a strategic investor.
As discussions between Tencent and Ubisoft continue, the outcome could shape the future of one of the gaming industry’s most prominent companies. The reaction from fans have been mixed throughout this whole situation.
On that note, what do you think about Ubisoft potentially going private in the future? Do you think this is a good step considering Ubisoft’s current state? Let us know in the comments section.
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