Big picture: Recent reports indicate that Tencent wants to become Ubisoft’s largest shareholder by developing an aggressive deal to buy shares from public shareholders and the Guillemot family. Tencent is likely looking for more international gaming revenue as both companies have been hit with turbulence recently.
Sources have said Reuters reported that Tencent executives met with the Ubisoft founding family Guillemot in May to discuss buying an additional stake in the company. Tencent bought five percent of Ubisoft in 2018. It’s unclear how much more Tencent wants, but it’s aiming to become Ubisoft’s largest shareholder.
Details of the deal are yet to be finalized, but Tencent is making an aggressive premium offer. Ubisoft’s share price has been 44 euros per share for the past three months, but Tencent is offering 100. Ubisoft’s historical ceiling was 108 in 2018. The Guillemo family owns 15 percent of Ubisoft, while shareholders own about 80 percent. Tencent wants to buy shares in both groups.
Owning more of Ubisoft could be a way for Tencent to increase its stake in games through international revenue streams. The company has recently suffered from regulatory restrictions in the Chinese domestic market.
Last August, China tightened restrictions on gaming for those under 18, limiting their gaming time to a few hours per week. There were hopes that China would loosen those restrictions in a year, but Tencent said it saw no signs that this would happen.
The company also had to malfunction its NFT ambitions in China due to the government’s strict regulations in the sector. Last summer, China froze new licenses to monetize games. It started approving games again in April, but none from Tencent.
Together with Logitech development cloud gaming laptop. It will launch later this year and will allow users to play games via streaming services such as Xbox Cloud Gaming and Nvidia GeForce Now.
Ubisoft has had its own issues lately. Last month I had cancel four games, including the free Ghost Recon, the VR game Splinter Cell, and two unannounced games. During the same earnings announcement, the company announced a delay in the release of its upcoming game Avatar and another unannounced project to 2023-2024.
Rumors in April proposed that several investment firms were looking to take over Ubisoft, including Blackstone, KKR & Co and others. However, it is not clear if Ubisoft is interested in a buyout.
The publisher is expected to unveil its next Assassin’s Creed game in September. Ubisoft will release two major releases this fall: Mario + Rabbids Sparks of Hope and Skull & Bones. The latter went through a painful five-year cycle of development.
Tencent currently owns all of Riot Games, 40 percent of Epic Games, nine percent of Frontier Developments, and a majority stake in Clash of Clans maker Supercell. He wants to buy Sumo for $1.3 billion.
Credit: www.techspot.com /