Vivendi kills bid to take over Ubisoft

LONDON/PARIS: Vivendi SA is selling its 27% stake in French gamemaker Ubisoft Entertainment SA in a €2.01 billion ($2.46 billion) deal after its typical strategy of seeking creeping control failed to pan out.

Under the deal announced on Tuesday, Ubisoft’s founding Guillemot family will once again be Ubisoft’s top shareholder and will be joined by Tencent Holdings Ltd and the Ontario Teachers’ Pension Plan as equity investors.

Tencent will acquire about 5% of Ubisoft and the Canadian pension will gain a 3.4% stake. Vivendi can’t acquire any position in the Montreuil, France-based company for five years.

The pact is a victory for Ubisoft’s cofounder and chief executive Yves Guillemot, who sought to ward off a takeover attempt by Vivendi. It opens up the Chinese market to the gamemaker through a separate publishing deal with Tencent.

Guillemot has long argued that a videogame company can’t grow within a media conglomerate and that independence would allow Ubisoft to take necessary risks.

“A few months ago Vivendi approached us to say they’d be willing to consider an exit,” Ubisoft chief financial officer Alain Martinez said on a conference call with reporters. “We’d started negotiations in China in parallel, with Tencent.”

Ubisoft rose 1.4% to €69.54 at 9.03 a.m. in Paris yesterday. Vivendi sold its stake at €66 a share, 3.7% below where the stock closed on Tuesday.

In addition to the purchases by Tencent and the pension plan, the Guillemot brothers will buy some of the shares, Ubisoft will repurchase stock as well and institutional investors acquired more than a third of the stake.

Alongside the share deal, Tencent has agreed to operate, publish and promote several of Ubisoft’s games in China, a market of more than 500 million players.

For Vivendi’s billionaire backer and Chairman Vincent Bollore, it marks yet another major exit from the video-game industry he’s long coveted.

Vivendi, once a majority holder of Activision Blizzard Inc after the merger of its Blizzard unit with that company, sold its last piece of Activision in January 2016.

Vivendi still owns Gameloft SE, also founded by the Guillemots, which it acquired in a hostile takeover in 2016.

In recent months, Ubisoft’s soaring share price has been seen by some analysts as a deterrent for Vivendi to make a bid, though the possibility continued to cloud Ubisoft’s outlook.

Vivendi first started to acquire the stock in 2015.