Investment firms could consider taking over Ubisoft

Rumor machine: With all the recent news about game studio acquisitions, it probably comes as no surprise to learn that Ubisoft is being considered for a possible takeover. However, it probably won’t be by the usual suspects – Microsoft or Sony. The two main stake holders are the mega-conglomerate Blackstone and the investment company KKR. Other anonymous companies are also eyeing the publisher.

Assassin’s Creed publisher Ubisoft Entertainment has reportedly caught the eye of private equity firms Blackstone Inc, KKR & Co and others. Bloomberg sources familiar with the matter say the companies have analysis prospects but did not commit to pursuing a buyout.

Ubisoft co-founder and chairman Yves Guillemot and his family are majority shareholders in the company with a collective 15% stake. Shares of the French game maker have fallen nearly 45% in the past year, with a market capitalization of 4.64 billion euros ($5.05 billion).

While the company appears ripe for the picking, investors are in early deliberations and unsure whether to proceed with offers. It’s also not entirely clear whether Ubisoft wants to be taken over. Guillemot and other executives were vague on the issue and kept their cards close to their vests.

French media giant Vivendi has pursued a slow, hostile takeover of Ubisoft for years. In 2017, Vivendi was poised to leapfrog with a 26% stake. However, a slight rise in valuation put the conglomerate’s plans on hold, dashing takeover hopes for at least six months.

Eleven months later, Vivendi announced that it was divesting all stake in Ubisoft due to a three-year growth spurt that saw the value of the shares increase by more than 400%. It was also a good move, as the stock fell more than 64% from $24.10 per share in July 2018 to its current price of $8.62. The drastic drop makes Ubisoft’s takeover price attractive to investors, while an injection of fresh capital could be enough to get the publisher back on track. Win-win.