Tencent aims to raise stake in 'Assassin's Creed' maker Ubisoft - sources
04/08/2022 11:14
(Adds details on share offer, comments)
By Julie Zhu and Selena Li
HONG KONG, Aug 4 (Reuters) - Tencent Holdings Ltd 0700.HK
plans to raise its stake in French video game group Ubisoft
Entertainment SA UBIP.PA as the Chinese gaming giant pivots to
the global gaming market, four sources with direct knowledge of
the matter told Reuters.
China's largest social network and gaming firm, which bought
a 5% stake in Ubisoft in 2018, has reached out to the French
firm's founding Guillemot family and expressed interest in
increasing its stake in the firm, the sources said.
It is not clear how much more Tencent plans to own in
Ubisoft, valued at $5.3 billion, but Tencent aims to become the
single largest shareholder of the French company with an
additional stake purchase, two of the sources said.
Tencent plans to buy a part of the additional stake in
Ubisoft, the maker of the blockbuster "Assassin's Creed" video
game franchise, from the Guillemot family, which owns 15% of the
firm, three of the sources said.
Tencent could offer up to 100 euros ($101.84) per share to
acquire the additional stake, two of the sources with knowledge
of the internal discussions, said. It paid 66 euros per share
for the 5% stake in 2018.
Ubisoft shares surged more than 10% after the Reuters
report.
Two of them added the Chinese firm will also seek to acquire
shares from public shareholders of Ubisoft, to boost its
ownership and become the single-largest shareholder.
About 80% of the French firm's shares are owned by public
shareholders, according to its latest annual report.
All the sources declined to be named as they are not
authorised to speak to the media.
Tencent and Ubisoft declined to comment.
Representatives of the Guillemot family could not be
immediately reached for comment.
The details of the deal have yet to be finalised and are
subject to change, said the people who spoke on condition of
anonymity as the information is private.
The planned stake purchase, Tencent's latest major foreign
deal since a regulatory crackdown in late 2020, will help it
offset some of the pressures in the domestic gaming market.
China's video games market, the world's largest, has become
fiercely competitive.
"Tencent is very determined to nail down the deal as Ubisoft
is such an important strategic asset for Tencent," one of the
people said.
At the top end of 100 euros per share, Tencent's offer will
be a premium of 127% to the stock's 44 euros average price over
the past three months, and is close to its historical price
ceiling at 108 euros in 2018.
Tencent has submitted to the Guillemot family a term sheet -
a non-binding offer describing the basic terms and conditions of
an investment, said one of the people, with a price "way above"
the company's current price to ward off potential competition.
The aggressive offer also comes as global gaming power
houses have been rushing to snap up quality independent game
makers in recent years, which are in scarcity, two of the
sources said.
Tencent's senior executives flew to France in May to meet
the Guillemot family about the purchase, two of the people said.
($1 = 0.9819 euros)
(Additional reporting by Pamela Barbaglia in London, Sudip
Kar-Gupta and Richard Lough in Paris; Editing by Sumeet
Chatterjee and Jacqueline Wong)
((julie.zhu1@thomsonreuters.com; +852 2843 6519; Reuters
Messaging: julie.zhu1.thomsonreuters.com@reuters.net))