Nearly three years after launching what seemed destined to be a hostile takeover bid for video game publisher Ubisoft, Vivendi has decided to sell off its holdings in the company.
The French media conglomerate and Ubisoft have reached an agreement that will see Vivendi sell its 27.3 percent stake in the company for just over €2 billion, or $2.4 billion. As part of the agreement, Chinese game maker Tencent will acquire a 5 percent stage in Ubisoft — and the Ontario Teachers' Pension Plan will be a major investor as well.
"The investment from new long-term shareholders in Ubisoft demonstrates their trust in our future value creation potential, and Ubisoft's share buy-back will be accretive to all shareholders," said CEO Yves Guillemot in a statement.
Ubisoft, since the beginning, has fought against Vivendi's investment in the company, buying back shares and actively courting institutional investors in case a buyout offer ever surfaced. Those efforts and a successful slate of games which helped the company regularly beat earnings expectations helped keep Vivendi at bay.
Last November, Vivendi entered a time window where regulators compelled it to either make a formal takeover offer or release some of the shares they own. It opted to sell shares, the first sign it was rethinking its investment in the game maker.
The 3,787,878 shares held by Ubisoft will be split among many parties — with each paying €66 ($80.9) per share. Ubisoft will buy back slightly more than 9 million shares (8.1% of its capital). Tencent will take a 5% stake in the company (5.6 million shares). The Ontario Teachers Pension has committed to acquire 3.8 million, or a 3.4% ownership stake in Ubisoft.
Guillemot and his brothers, who already own a substantial stake will acquire another 3 million shares. All totaled, the family now holds 24.6 percent of Ubisoft's voting rights and 18.5 percent of its share capital.
Institutional investors will acquire the remainder of Vivendi's shares.
Tencent is the most interesting of the new investors. The company already owns Riot Games, makers of League of Legends as well as a stake in Epic Games, whose game engine is widely used throughout the industry. It also has strategic agreements with EA, Take-Two Interactive Software and other major publishers.
As part of its investment, Tencent and Ubisoft have entered into a strategic agreement that will bring some of Ubisoft's biggest franchises to China in the coming years.
"The new strategic partnership agreement we signed will enable Ubisoft to ... fully leverage a market with great potential," said Guillemot.