Ubisoft Shares Skyrocket On Buyout Speculation

Shares in Ubisoft, France’s largest video game developer, have surged more than 35 percent in recent days following a report of buyout interest by China’s Tencent and the firm’s founding Guillemot family.

The steep rise in share price on Friday was the biggest since Ubisoft went public in 1996.

Tencent Holdings, one of China’s biggest tech firms and the world’s biggest video game developer by revenue, and the Guillemots are considering options including a buyout of Ubisoft after the company lost half its market value this year, Bloomberg reported.

Tencent and Guillemot Brothers Ltd have been speaking with advisers about ways to stabilise the company and improve its value, with one option being to take it private, the report said.

Gaming slump

Tencent owns roughly 10 percent of Ubisoft’s net voting rights, while the Guillemot family holds about 20 percent.

Ubisoft has been seen as a potential buyout target for some time, amidst slowing sales and a broader slump in video games that followed a boom in 2020 and 2021 during the Covid-19 pandemic.

In 2022, amidst a series of large deals in the video game industry, Tencent bought 49.9 percent of the Guillemot Brothers holding company in addition to its direct stake in Ubisoft, in a deal that was seen as designed to keep potential buyers at bay.

Last month Ubisoft shares fell to their lowest in more than a decade after the company cut its net bookings guidance for its 2025 fiscal year to around 1.95 billion euros (£1.64bn), down from 2.32bn euros in 2024.

The company also delayed the release of “Assassin’s Creed Shadows” by three months to 14 February, 2025 after “softer than expected” demand for “Star Wars Outlaws”, which the company released in August.

Investor pressure

Minority stakeholders including AJ Investments, an activist investor with less than a 1 percent stake in the firm, have been pushing for a take-private deal or a sale to a strategic investor such as a private equity group or Tencent.

Following the outlook cut and second-quarter performance that fell short of expectations, Ubisoft chief executive Yves Guillemot said the company’s executive committee would launch a review to “further improve” execution.

The worldwide video gaming market is set to grow only 2.1 percent year-over-year in 2024, according to research firm Newzoo, as users continue to play older games and hold off purchases due to a cost-of-living squeeze.