Tencent and Ubisoft founders the Guillemot family are reportedly considering teaming up to take the company private, after it lost more than half its market value this year.
According to Bloomberg sources, the Chinese conglomerate – which already owns around 10% of Ubisoft – and Guillemot Brothers Ltd have been speaking with advisers to explore ways to stabilize Ubisoft.
One of the possibilities discussed would involve teaming up to take Ubisoft private, it’s claimed, though talks are said to be at an early stage, and there’s no certainty they will lead to action.
Tencent and the Guillemot family are also considering other alternatives, according to Bloomberg.
Last month, Ubisoft‘s share price dropped to its lowest point in nearly 11 years. The most recent dips followed Ubisoft’s announcement that it had delayed Assassin’s Creed Shadows, and the disappointing launch performance of Star Wars Outlaws.
Earlier in September, a minority investor called on Ubioft’s management to take the company private or let it be sold to a strategic investor.
Hedge fund AJ Investments published an open letter calling for strategic and structural changes at Ubisoft.
It urged the board to consider taking the company private, “implement a comprehensive cost reduction program and optimize staffing levels to be more comparable with industry leaders,” increase its focus on core IPs, and consider replacing current CEO Yves Guillemot.
Slovakia-based AJ Investments holds less than 1% in Ubisoft.
Balc0ra on October 4th, 2024 at 20:58 UTC »
I kinda hoped it would end up like THQ. As in IPs were auctioned off. The current Ubisoft leadership is carp. But these people know how to milk harder... In a bad way.
bjb406 on October 4th, 2024 at 20:26 UTC »
Can't view article on work firewall, so I'm just going off headline.
Is them taking it private a bad thing? I definitely don't like Tencent being involved with a company I'm buying something from, but I've come to the opinion at least in general, the privately owned companies tend to have much better business models and produce better products than public ones. When a company is public, the shareholders primary focus for getting return on their investment is by waiting for the stock price to go up and then selling. Whereas in a publicly owned company, you can't sell freely, so typically the way you get a return is from dividends, and the executives will chase whichever the share holders think is important. A company focused on stock price will be primarily focused on growth, making the company as large as possibly, making more games with more IP's and more genres, buying up tons of smaller companies and spreading as wide as possible. Whereas a company focused on dividends and therefor profits will focus on getting the most out of what is there, making sure the games they do make are actually well received rather than pumping them out ASAP. That said, again I wasn't able to read the article so I don't know the context. Am I wrong here do you think?
RagnarokNCC on October 4th, 2024 at 19:47 UTC »
Oh, so they’re depressing the share price with underwhelming, underperforming products on purpose
/s