Tencent has made a strategic purchase that could pave the way to a buyout of Ubisoft in the future.
Ubisoft has fended off a potential hostile takeover from Tencent by selling shares of the Guillemot family's company instead of Ubisoft stock. Tencent has purchased a 49.9% stake in Guillemot Brothers Limited, a company run by Ubisoft's founding Guillemot family. The Guillemot brothers have the largest individual shares of Ubisoft stock out of all shareholders, so this technically gives the founders a way to sell their shares if they decide to.
"Post transaction, Guillemot Brothers Limited will hold 17,086,199 Ubisoft shares, including 9,086,199 shares held via derivative contracts," reads a press release.
Tencent paid 300 million euros ($297 million) for the 49.9% stake in the Guillemot's company, and Ubisoft's board of directors has approved Tencent to increase its direct stake in the company from 4.5% to 9.9%. After this deal, Guillemot Brothers Limited will have 29.9% voting rights in Ubisoft in conjunction with Tencent. As part of the deal, Tencent cannot increase its stake in Ubisoft beyond 9.9% for another 8 years, meaning they cannot trigger a hostile takeover. Tencent also cannot sell its shares in Ubisoft for at least 5 years.
The press release also mentions that Ubisoft has strategically partnered with Tencent to release multiple mobile and PC games in China.
Earlier this year it was reported that Tencent was looking to buy more Ubisoft shares directly from the Guillemot family. Tencent had originally helped Ubisoft thwart a hostile takeover attempt from Vivendi in 2018. Earlier reports suggested Tencent would off a 100 euro premium, but this deal reflects an 80 euro per share price.