Tencent and the Guillemot family are said to be considering a buyout of Ubisoft

Original story, October 4 2024: In efforts to stabilize Ubisoft amid recent challenges, Tencent and Guillemot Brothers Ltd are contemplating a potential acquisition to take the company private.

According to information obtained by Bloomberg, the companies have initiated discussions with advisors about various strategies. However, these discussions are in preliminary stages, and no definitive buyout plan is confirmed.

The situation comes after AJ Investments, a minority stakeholder, suggested that Ubisoft should privatize due to significant drops in its stock price.

The market value of Ubisoft has decreased by 54% this year, setting it at €1.4 billion ($1.5 billion). The decline intensified to a decade-low following the underwhelming sales of Star Wars Outlaws.

Guillemot Brothers Ltd is controlled by the Guillemot family, founders of Ubisoft, and holds over 20% of the firm's voting rights. Tencent possesses a 9.2% stake.

In 2022, Tencent expanded its investment in Guillemot Brothers Ltd, thereby indirectly increasing its involvement in Ubisoft.

Bloomberg's attempt to get comments from Ubisoft, Guillemot Brothers Ltd, and Tencent revealed that the first two declined, whereas Tencent has not yet replied.

In response to financial issues and disappointing Star Wars Outlaws results, Ubisoft cut its financial goals, delayed the release of Assassin's Creed Shadows until February 2025, and started an internal evaluation to enhance its operations.

These issues were discussed in the GamesIndustry.biz Microcast, where Rob Fahey offered insights on the company's challenges in his column.

Fahey commented: "Ubisoft plays a crucial role in the gaming industry, especially in Europe. Achieving a more stable, well-managed state is key, which won't happen with superficial management changes. Growth and improvement might need substantial leadership adjustments."

Update, October 7 2024: Ubisoft has responded to media reports about the possible buyout by Tencent and Guillemot Brothers Ltd, stating that all strategic alternatives are regularly evaluated.

The statement says: "Ubisoft is aware of recent media speculation about potential interests in the Company. It routinely assesses all strategic options to benefit stakeholders and will update the market when suitable.

"The management remains focused on executing a strategy focused on two primary pillars: Open World Adventures and GaaS-native experiences."

CNBC noted on Friday that following the announcement, Ubisoft's stock surged by 33.5% at the market close.