Vivendi makes its freedom to Ubisoft, who has allied with Tencent

Media giant Vivendi has abandoned his hostile takeover of Ubisoft by announcing Tuesday the sale of its stake in the capital of the French publisher of video games for two billion euros. (Photo Lionel BONAVENTURE. AFP)

Media giant Vivendi (PA:VIV) has abandoned his hostile takeover of Ubisoft (PA:UBIP) in announcing Tuesday the sale of its stake in the capital of the French publisher of video games for two billion euros.

The departure of Vivendi allows Ubisoft to return to his capital, in the amount of 5%, a strategic partner of the chinese giant internet Tencent.

The agreement with Tencent will allow Ubisoft to speed up its development in China in the years to come, “and to tap into a market whose potential is considerable,” said Yves Guillemot, CEO of Ubisoft, who is found with his family, the control of the group they had founded.

Vivendi, who still holds the publisher of video games for mobile Gameloft (PA:GLFT), realizes a comfortable gain in the transaction, since the group acquired its interest in the last three years for a total amount of 794 million euros.

But this outflow of capital is a failure for the group, Vincent Bolloré, who had assured him that his rise in the capital of Ubisoft showed “a willingness to share ownership in the long term”.

Vivendi had encountered upon his arrival in the capital of Ubisoft’s opposition to Yves Guillemot, supported by his family and employees in its battle to defend the independence of his company.

From the beginning, Yves Guillemot had stated that the marriage would be destructive and detrimental to shareholders.

Announcements Tuesday, allow the brothers Guillemot regain control of the group they founded. Their family holding company Guillemot Brothers SE, redeems a portion of the shares sold by Vivendi.

After the operation, “the concert by the Guillemot family will represent 18.5 percent of capital and 24.6% of the voting rights,” said Alain Martinez to journalists.

– China, second world market? –

The partnership with Tencent must allow Ubisoft to establish its presence on the chinese market, and in particular for its flagship games such as “Assassin’s Creed” or “Rainbow Six”.

“With this agreement we will be in a better position to obtain the permission of a game”, and then to distribute it and provide “operational support to the day-to-day” to the players, said Alain Martinez, chief financial officer of Ubisoft.

“Tencent is the first platform in the world with a billion players monthly, it is a strike force considerable”, he stressed.

For him, China has the potential to become the “third” or even “the second” territory for Ubisoft behind the United States, dethroning the passage France, Germany or the United Kingdom, which occupy in turn the second place with 10% of sales.

“But you have to be cautious”, because the partnership with Tencent “does not mean that all of our games are going to be approved and that we are going to have a success in any case”, he explained.

Even if they do not have permission to sale officially in China, “Assassin’s Creed” or “Rainbow Six” are already very played in this country: the players buy them informally via Hong Kong or Taiwan, or on platforms of download international.

China is already in the “sixth or seventh” rank in terms of number of players for these games, said Alain Martinez.

In addition to Tencent, the pension funds, Ontario Teachers will also enter the capital of Ubisoft, a total of 3.4%. Already a shareholder of Google (NASDAQ:GOOGLE), Samsung (KS:005930) or Facebook (NASDAQ:FB), this fund had already reported some time ago his desire of entering the capital of Ubisoft, said Alain Martinez.

Ubisoft redeems itself also a part of the securities of Vivendi. The rest will be placed with various investors.

Ubisoft was not the only involvement in problem for Vivendi. The group of Vincent Bolloré is currently dealing with a revolt led by the investment fund activist Elliott in Telecom Italia (MI:TLIT) (Tim), which it owns 24% of the capital.

Vivendi is also at loggerheads with the Italian group Mediaset, which he now holds 28.8 per cent of the capital.

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