Ubisoft logo displayed throughout Brand Licensing Europe held at Excel London on September 24, 2024.
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Shares of a French video game publisher Ubisoft The stock soared more than 30% on Friday following media reports. tencent and the company’s founders, the Gilmot family, are considering the possibility of acquiring the company.
Bloomberg News reported Friday that Ubisoft’s minority shareholders Tencent and the Guilmot family are considering an acquisition, among other options, after the company lost more than half of its market value this year.
One possibility currently being discussed is that Tencent and the Gilmo family team up to take the company private, Business News Agency reported, citing people familiar with the matter.
Ubisoft stock soared 33.5% by market close on Friday following the release of the report.
Ubisoft declined to comment on the Bloomberg News report. Tencent did not respond to a request for comment from CNBC on Friday.
The European gaming giant, best known for its popular “Assassin’s Creed” series, has been in a state of uncertainty lately due to a lackluster pipeline of triple-A games and investor concerns about the company’s overall management.
Ubisoft last week delayed the release of the next installment in the popular game series, Assassin’s Creed Shadows, for three months until February 14, 2025, after demand for its Star Wars Outlaws was “lower than expected.” announced that it would be postponed. ” The game was released in August.
Ubisoft also lowered its guidance for net bookings for fiscal year 2025 to approximately €1.95 billion, lower than the €2.32 billion that Ubisoft reported for fiscal year 2024.
Tencent owns about 10% of Ubisoft, making it one of China’s largest technology companies. The company is best known in China for its high market share in the gaming sector and develops the Chinese multiplayer online battle arena game Honor of Kings, which it publishes under the TiMi Studio Group publisher division. .
activist pressure
Speculation about a possible takeover comes as Ubisoft shares are trading at 10-year lows. Last week, activist investor AJ Investments, which owns less than 1% of Ubisoft, announced it had garnered the support of 10% of Ubisoft’s shareholder base to help drive change at the company.
In an open letter last Thursday, the private equity firm said it had hired “industry experts” to replace the current Ubisoft management team to implement Ubisoft’s turnaround strategy. It called on Ubisoft to sell itself to a private equity group or Tencent.
After Ubisoft’s guidance cuts and second-quarter results that were “less than” the company’s expectations, CEO Yves Guillemot said the company’s executive committee would “further improve its execution.” announced that it would begin a review to improve the situation.
In addition to the postponement of premier titles, Ubisoft is also suffering from a recession in the gaming industry as a whole. According to research firm Newzoo, the global gaming market is expected to grow by just 2.1% year-on-year in 2024, far from the rapid growth levels seen during the coronavirus pandemic in 2020 and 2021. Not as good as that.
James Lockyer, a technology research analyst at British investment bank Peel Hunt, told CNBC earlier this week that part of the problem for game publishers today is that gamers spend more time with older games than new titles. He said it was something he was spending.
“Increased choice and cost-of-living pressures mean consumers’ cash is spread even thinner, often resulting in lower-than-expected gaming returns and ROI (return on investment),” Lockyer told CNBC via email.