As Ubisoft’s latest Assassin’s Creed game faces delays, independent board members are reviewing strategic options and analysts are speculating whether the gaming giant may ultimately sell itself. The troubled French publisher last week delayed the release of its upcoming Assassin’s Creed Shadows game by a month and appointed advisers to review its strategic options, suggesting that company management may be quietly looking to sell all or part of the business. Ubisoft has yet to tell shareholders about its plans for strategic transactions. The company said in a recent investor update that “once the transaction is finalized, it will notify the market in accordance with applicable regulations.” CNBC spoke to industry analysts to find out which names they think could be potential buyers for the game maker. That’s what they said. Analysts say Tencent is one of the most likely candidates to propose an acquisition of Ubisoft. In October, Bloomberg News reported that Tencent had discussed working with the Guillemot brothers, who jointly hold the largest single stake in Ubisoft, to take the company private. Earlier this week, Bloomberg reported that Tencent and Guillemots were considering creating a new venture that would include certain Ubisoft assets. According to Bloomberg, Tencent will take a stake in the joint venture and gain greater control over some of Ubisoft’s intellectual property rights. “As disclosed on January 9, Ubisoft has appointed advisors to review and pursue various transformation strategies and capital options to capture the greatest value for stakeholders,” a Ubisoft spokesperson told CNBC. “No action will be taken until the review is complete. No comment will be made.” Tencent declined to comment for this story. Michael Pachter, managing director of gaming at Wedbush Securities, told CNBC that Tencent has more reason to acquire Ubisoft than other candidates. He added that most Western buyers would be put off by the company’s large cost base. “Ubisoft’s cost structure is too high for any publisher to handle,” Pachter said, adding that peers such as Activision, Electronic Arts and Take-Two Interactive all have smaller headcounts than Ubisoft. , but the income is higher than Ubisoft. According to Ubisoft’s latest quarterly financial report, as of September 2024, Ubisoft had 18,666 employees. “I would say the likelihood of a Western company bidding is slim,” Pachter said. “What’s left are foreign buyers with strategic interests.” Microsoft may be hesitant to acquire Ubisoft as it faces intense regulatory pressure over its $69 billion acquisition of gaming giant Activision Blizzard . James Batchelor, a business games writer and former editor-in-chief of GamesIndustry.biz, said Tencent’s acquisition of Ubisoft may boost the Chinese technology giant’s international expansion plans. “Tencent has been investing in more and more studios in the West as growth in the domestic Chinese market has been restricted,” Batchelor told CNBC. In 2022, Tencent sold its stake in Guillemot Brothers Limited, which controls the family (majority of approximately 15% of Ubisoft shares) to 49.9%, giving the company 5% of voting rights. Tencent also acquired British video game manufacturer Sumo Group in 2021. Guillemot Brothers Many analysts and investors expect that the Guillemot brothers may play a role in the acquisition of Ubisoft. Josh Chapman, managing partner at venture capital firm Konvoy Ventures, told CNBC: “The most obvious suitor for Ubisoft would probably be another large publisher or a private equity-backed going-private deal, possibly between Tencent and Led by the Guillemot family, Ubisoft’s roots date back to the 1980s when the Guillemot brothers’ parents owned a farm business owned by all five brothers – Christian, Claude, Gerard, Michel and Yves Guillemot. Special – provides accounting, shipping and delivery support to the family business. In 1986, Ubisoft was officially founded. It was named “Ubi Soft”, which means “ubiquitous software”. Since its establishment, Ubisoft has been controversial. has expanded to include thousands of employees. In 2020, the company faced a major scandal over sexual misconduct allegations, which led to several high-level executives leaving the company. Ubisoft recently made a series of layoffs to cut costs. Shares have fallen more than 80% in the past five years. As of Wednesday’s close, the company had a market value of 1.6 billion euros ($1.65 billion). “Going private through mergers and acquisitions can provide a viable path for the company,” Chapman added. financial path. “Ubisoft’s broad intellectual property portfolio and global reach make it an attractive target for consolidation in the games industry. ” Savvy Games Group Another company that could be a potential buyer of Ubisoft is Savvy Games Group, a Saudi gaming and esports company owned by the country’s sovereign wealth fund. The Saudi Public Investment Fund announced in 2021 Pachter, who founded Savvy Games Group in 2006 to support Saudi Arabia as a gaming hub, with Crown Prince Mohammed bin Salman serving as the company’s chairman, said he expects Savvy Games Group to be a candidate for Ubisoft’s acquisition. Bidders. Pachter told CNBC: “Our vision is to create jobs in Saudi Arabia so that when Ubisoft experiences attrition, it can replace those lost jobs by hiring there. Savvy Games Group had no immediate comment when contacted by CNBC. The company has committed billions of dollars to acquire and invest in game publishers. It owns minority stakes in EA, Take-Two and Activision Blizzard. In 2023, Savvy Games Group acquires US mobile game publisher Scopely for $4.9 billion “With Scopely, they can set it up on mobile devices,” Pachter said. “Their next acquisition should be a PC or console developer. Ubisoft will meet all conditions. ” Savvy Games Group also holds minority stakes in Nintendo and Sweden’s Embracer Group, although the group last year reduced its stake in Nintendo to 7.54% from 8.58% previously. “Given the macroeconomic conditions in the industry, Ubisoft It’s unlikely to be acquired in a multi-billion dollar deal like Microsoft and Activision Blizzard,” he said. “Companies that can do this focus on cutting costs, not increasing them.”
Who Will Buy Ubisoft (UBI)? Potential suitors for Assassin’s Creed creator | Real Time Headlines
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