Tencent and Guillemot family reportedly planning Ubisoft buyout

Original story, October 4 2024: Tencent and Guillemot Brothers Ltd have been exploring ways to stabilise Ubisoft in the wake of its recent troubles, which could result in the pair buying out the publisher and taking it private.

Sources close to the matter told Bloomberg that the two companies have spoken to advisors about potential routes forward, although these considerations are at an early stage with no guarantee they will lead to a buyout.

The news follows the call from a minority shareholder, AJ Investments, for Ubisoft to go private following sharp declines in the company's share price.

Ubisoft's market capitalisation stands at €1.4 billion ($1.5 billion) after shares have fallen 54% so far this year. The price dropped to a ten-year low after the launch of Star Wars Outlaws, which the company has since admitted saw "softer than expected" sales.

Guillemot Brothers Ltd is a company run by the family of the same name, some of which founded Ubisoft – including the publisher's long-serving CEO Yves Guillemot. GBL holds just over 20% of the publisher's voting rights, while Tencent holds 9.2%.

In 2022, Tencent increased its stake in GBL, indirectly increasing its investment in Ubisoft.

Bloomberg reached out to Ubisoft, GBL and Tencent for comment. The first two declined, while the latter has yet to respond.

Following its financial troubles and the disappointing sales of Star Wars Outlaws, Ubisoft reduced its financial targets for the current year, delayed Assassin's Creed Shadows to February 2025, and initiated an internal review on how the company can improve its performance.

We discussed Ubisoft's woes in a recent edition of The GamesIndustry.biz Microcast, while contributing editor Rob Fahey explored the factors behind the publisher's struggles in his column.

He wrote: "Ubisoft remains an incredibly important part of the games industry landscape, and everyone working in the industry, especially in Europe, would ultimately benefit from it being in a healthier and better-managed state – which will not be achieved by bringing in a bunch of fresh-faced MBA-wielders to slash and burn. It may, however, also be hard to achieve that healthier and better-managed state without real change at the top of the company."

Update, October 7 2024: Ubisoft has responded to press reports about a potential buyout by Tencent and Guillemot Brothers Ltd, emphasising that it is constantly exploring all options for how the publisher should move forward.

The statement reads: "Ubisoft has noted recent press speculation regarding potential interests around the Company. It regularly reviews all its strategic options in the interest of its stakeholders and will inform the market if and when appropriate.

"The Company reiterates that management is currently focused on executing its strategy, centered on two core verticals – Open World Adventures and GaaS-native experiences."

CNBC reported on Friday that Ubisoft's share price rose 33.5% by close of trading after news of the potential buyout emerged.