Ubisoft officials confirm that Vivendi is attempting a hostile takeover of the company, buying large quantities of shares, possibly in an attempt to become a major shareholder.
Ubisoft, the developer and publisher behind games like Assassin's Creed and the upcoming third-person shooter The Division, is apparently ramping up a defense against a hostile takeover. According to Ubisoft officials, the mass media company Vivendi is attempting to purchase a large quantity of Ubisoft's shares.
While game companies often merge or buy each other out, what Vivendi is allegedly attempting is considered to be a hostile takeover. Rather than working out a deal with Ubisoft directly, they're trying to purchase a large quantity of Ubisoft's stocks in order to become a large shareholder, or possibly even a majority shareholder. Doing so means that Vivendi could make big decisions that could affect Ubisoft, even going so far as to change the Board of Directors if they manage to become majority shareholder. As it stands, they've already purchased 15% of Ubisoft's shares.
Ubisoft is employing a strategy to defend against this hostile takeover by approaching Canadian investors to buy shares in the company. Ubisoft chairman Yves Guillemot released a statement that the company is attempting to find long-term investors in order to maintain control. It's imperative that Ubisoft finds investors that aren't interested in reselling their shares, because Vivendi has bought many of its shares from existing stockholders, which is adding to the imbalance of power.
This isn't the first time that Vivendi has had major influence over a game developer. They previously acquired Blizzard entertainment in the late 1990s, which allowed them to create the merger between Blizzard and Activision. However, they've since given up their stock in the company, selling back a whopping 429 million shares to Activision at a cost of $5.83 billion. In this instance, Vivendi was allegedly looking to give up its control over Blizzard Activision, but it remains to be seen what they would do if they gained control of Ubisoft.
Although going public is a great way for game developing and publishing companies to gain serious revenue, it comes with a certain loss of freedom as a result. Other game companies, like Valve, have refrained from going public and stay off the stock market. Although EA allegedly attempted a buyout of Valve for $1 billion, Valve had the independence to choose to refuse the offer, and EA didn't have the option to perform a hostile takeover since Valve doesn't have buyable shares. Having shareholders at worst can mean a single person or company can control what the developer does, but even at best, developers and publishers have to meet their shareholders' expectations.
There's no telling what Vivendi's intentions are in acquiring Ubisoft at this time; it could be that they simply see it as an excellent investment, or they may have plans that could vastly change the direction of Ubisoft's creations. For example, they could undo Ubisoft's decision to take the Assassin's Creed series off a yearly release schedule in order to increase profits, even if it means more unfinished, buggy games. Since The Division is releasing next month, chances are a hostile takeover won't affect it immediately, but it could have long-term consequences on any expansions, DLC, or future Ubisoft titles.
Source: The Globe and Mail