Vivendi Is Said to Target Hostile Bid for Ubisoft by Year-End

Vivendi Is Said to Target Hostile Bid for Ubisoft by Year-End
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Vivendi is considering making a bid for Ubisoft by the end of this year as the French media giant presses for a deal despite resistance from the game maker’s founding family, according to Bloomberg, citing people familiar with the plans.

While buying the maker of Assassin’s Creed is a priority, Vivendi doesn’t plan to seek discussions with Chairman and CEO Yves Guillemot, said one of the people. Vivendi has amassed a 25 percent stake Ubisoft but hasn’t been able to secure a seat on the board. The French media conglomerate bought  Gameloft, a company also founded by the Guillemots, in a hostile takeover last year.

A showdown over the much-larger Ubisoft could prove pivotal for Vivendi Chairman Vincent Bollore’s plan to expand in games and tie that business in with other parts of his media empire, which includes TV, music and advertising. If the price for Ubisoft, which has a market value of 5.5 billion euros, gets too steep, Vivendi may instead turn to Asia for gaming partnerships, the people said.

Vivendi has been pursuing Ubisoft for more than a year, after parting ways with U.S. video-game maker Activision Blizzard, which it once controlled. In September, the Guillemots won temporary respite at Ubisoft’s annual shareholders’ meeting after lobbying other investors for support. Vivendi, which had sought board seats to match its 25 percent stake in Ubisoft, held back from a direct confrontation. At the time, Vivendi pointed to double-voting rights for some of its stock that will boost its influence in 2017.

Ubisoft has been striving to show shareholders that its standalone strategy is delivering value. At current market prices, the remaining three-quarters of Ubisoft is valued at 4.2 billion euros. The Guillemot family holds a 13 percent stake. Vivendi’s net cash position was 1.1 billion euros as of the end of last year.

Vivendi also owns pay-TV provider Canal Plus and record business Universal Music Group. The French conglomerate is taking over advertising company Havas and has also tightened its grip over Italy’s phone company Telecom Italia, all part of Bollore plans to create a media-telecommunications empire in southern Europe.

Ubisoft’s stock has soared in recent months, adding 45 percent since the end of September. That makes a bid for the stock Vivendi doesn’t own increasingly expensive. Since Vivendi first revealed stakes in Ubisoft and Gameloft in October of 2015, Ubisoft’s market value has more than doubled, aided by the Vivendi interest and recurring earnings from subscriptions and in-game purchases.