Update, November 16: As part of today's quarterly earnings report, Vivendi say they will not pursue a Ubisoft takeover within the next six months.
Vivendi will not attempt a Ubisoft takeover for at least six months, according to the quarterly financial report the company published today. Vivendi are in position to force a takeover attempt this month, but are electing to delay the option.
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Vivendi currently own 26% of Ubisoft shares, and French law requires that they make an acquisition offer once they surpass 30%. A provision go into effect November 23 which will grant Vivendi double voting rights on some of its Ubisoft shares, a detail that could allow the company to reach the 30% necessary to start the takeover process. However, Vivendi will not be taking advantage of that fact.
The report also says that “in view of the opposition expressed by Ubisoft’s executive management, Vivendi will not seek representation on its board of directors.”
Nonetheless, Vivendi reiterate their intent to continue growing their investment in the videogame industry, and say that “the current unrealized capital gain on the Ubisoft investment is more than €1 billion.”
For their part, a company representative told GamesIndustry.biz that Ubisoft “will remain vigilant about [Vivendi’s] long-term intentions and will continue to pursue our strategy of growth and value creation in the interest of all our shareholders.”
Original Story, October 5: Things are coming to a head as Ubisoft attempt to maintain their independence in light of a likely takeover attempt from Vivendi later this year. The French publisher announced a mandate to an investment services company creating a new buy-back program that would allow them to repurchase their own shares.
The mandate would allow Ubisoft to purchase up to 4 million shares between the dates of October 5 and December 29, with all repurchased shares to be cancelled. This is in accordance with a measure passed at Ubisoft’s last shareholder meeting, which allows them to implement a buy-back program for up to 10% of their total shares.
Those dates offer little chance for coincidence, as it seems Vivendi’s takeover opportunity will come in November. Vivendi currently owns roughly 26% of Ubisoft’s shares, and according to French law they will be required to make a bid on the company when their share reaches 30%. This same law is how Vivendi purchased Gameloft, which had been founded by Michel Guillemot, Ubisoft co-founder and brother to CEO Yves Guillemot.
Of course, if Ubisoft repurchases and cancels shares the reduction of total stock means that Vivendi’s percentage ownership will increase. This is however a moot point, because Vivendi’s ownership is set to automatically increase due to a double voting rights provision intended to encourage long-term shareholder loyalty. November will see Vivendi’s stake in Ubisoft automatically increase over the 30% threshold that would require them to make a takeover bid.
With fewer shares on the market the price of those shares will increase, making it more difficult for Vivendi to stage a takeover of the French publisher. We’ve been hearing about the potential takeover for ages, and it seems we’ll find out what happens one way or the other next month.