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Forums - Gaming Discussion - Exclusive: Tencent Seeks To Raise Stake In Ubisoft - Sources

HONG KONG, Aug 4 (Reuters) - Tencent Holdings Ltd (0700.HK) plans to raise its stake in French video game group Ubisoft Entertainment SA (UBIP.PA) as the Chinese gaming giant pivots to the global gaming market, four sources with direct knowledge of the matter told Reuters.

China's largest social network and gaming firm, which bought a 5% stake in Ubisoft in 2018, has reached out to the French firm's founding Guillemot family and expressed interest in increasing its stake in the firm, the sources said.

It is not clear how much more Tencent plans to own in Ubisoft, valued at $5.3 billion, but Tencent aims to become the single largest shareholder of the French company with an additional stake purchase, two of the sources said.

Tencent plans to buy a part of the additional stake in Ubisoft, the maker of the blockbuster "Assassin's Creed" video game franchise, from the Guillemot family, which owns 15% of the firm, three of the sources said.

Tencent could offer up to 100 euros ($101.84) per share to acquire the additional stake, two of the sources with knowledge of the internal discussions, said. It paid 66 euros per share for the 5% stake in 2018.

Two of them added the Chinese firm will also seek to acquire shares from public shareholders of Ubisoft, to boost its ownership and become the single-largest shareholder.

About 80% of the French firm's shares are owned by public shareholders, according to its latest annual report.

"Tencent is very determined to nail down the deal as Ubisoft is such an important strategic asset for Tencent," one of the people said.

At the top end of 100 euros per share, Tencent's offer will be a premium of 127% to the stock's 44 euros average price over the past three months, and is close to its historical price ceiling at 108 euros in 2018.

Tencent has submitted to the Guillemot family a term sheet - a non-binding offer describing the basic terms and conditions of an investment, said one of the people, with a price "way above" the company's current price to ward off potential competition.

Exclusive: Tencent seeks to raise stake in 'Assassin's Creed' maker Ubisoft - sources | Reuters



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127% premium is insane, that's one way to keep competitors away.

Current largest shareholder of Ubisoft is Guillemot Family at 15%

I'm guessing Tencent are aiming for 20% minimum.

Last edited by Ryuu96 - on 04 August 2022

Dang, idk if Tencent is smart or not. I wonder why now? When Ubisoft isn't doing too hot, but this allows China to crack into the global market easier I guess. Tencent is all about money, they are hella rich, hate the heck out of them but that goes the same with other multibillionaire companies. It really is turning out to be some acquisition war...



Shatts said:

Dang, idk if Tencent is smart or not. I wonder why now? When Ubisoft isn't doing too hot, but this allows China to crack into the global market easier I guess. Tencent is all about money, they are hella rich, hate the heck out of them but that goes the same with other multibillionaire companies. It really is turning out to be some acquisition war...

Tencent has more than enough money to invest in the long run. They are gaining a massive over the entire gaming industry, so this move right now when Ubisoft is in bad shape makes sense for them. I hope Ubisoft stays independent from Tencent, we don't need more concentration of companies in so few hands...



You know it deserves the GOTY.

Come join The 2018 Obscure Game Monthly Review Thread.

Darwinianevolution said:
Shatts said:

Dang, idk if Tencent is smart or not. I wonder why now? When Ubisoft isn't doing too hot, but this allows China to crack into the global market easier I guess. Tencent is all about money, they are hella rich, hate the heck out of them but that goes the same with other multibillionaire companies. It really is turning out to be some acquisition war...

Tencent has more than enough money to invest in the long run. They are gaining a massive over the entire gaming industry, so this move right now when Ubisoft is in bad shape makes sense for them. I hope Ubisoft stays independent from Tencent, we don't need more concentration of companies in so few hands...

it would have, but then they paid the premium price so it doesn't really make sense financially. But most likely it's a mental price



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