Guillemot Brothers Ltd and Tencent are reportedly considering a buyout for Ubisoft and making it private, causing the latter's shares to skyrocket.
The rumors come from Bloomberg sources, who said that the two companies had talked with advisors about potential routes moving forward. However, these considerations are apparently still at an early stage as there are no guarantees they will result in a buyout.
Potential Ubisoft Buyout
The situation spread after a minority shareholder for Ubisoft, AJ Investments, called on the company to go private. This followed the time when the studio struggled with sharp declines in its share price.
The Assassin's Creed Shadows developer's market capitalization stands at roughly $1.5 billion. This was after shares have fallen 54% so far this year alone.
The price has dropped to a 10-year low following the release of Star Wars Outlaws. The company admitted the game saw "softer than expected" sales, according to Games Industry.
Guillemot Brothers Ltd is a firm that is led by the family of the same name. Some of them were founding members of Ubisoft.
They include the publisher's long-serving CEO Yves Guillemot. Guillemot Brothers Ltd holds a little more than 20% of Ubisoft's voting rights while Tencent holds 9.2%.
The situation comes as in 2022, Tencent increased its stake in Guillemot Brothers Ltd, which indirectly increased its investment in Ubisoft.
The first two companies have declined to comment on the matter and the latter has not yet responded to inquiries by the Games Industry.
On Friday following the report about the potential buyout, Ubisoft's share prices rose by as much as 33% in Paris. This marks the steepest gain the studio has seen since its initial public offering (IPO) in 1996, Bloomberg said.
Ubisoft's Recent Struggles
While Guillemot Brothers Ltd and Tencent are reportedly considering a buyout, they are supposedly also looking at alternatives. Ubisoft's struggles follow the underperformance of Star Wars Outlaws. It also comes after the delay of Assassin's Creed Shadows.
Over the years, Ubisoft has struggled to recover from a pandemic-era production crunch that led to delays in the release of many new games. The problem also resulted in the cancellation of other titles.
Ubisoft also cut its net bookings guidance for its 2025 fiscal year to about $2.14 billion. This is well below the $2.54 billion that the studio reported for its 2024 fiscal year. Tencent is one of the largest technology firms in China.
The latter is best known for its strong market share in gaming. It was responsible for bringing the multiplayer battle arena game Honor of Kings. The title is published under the TiMi Studio Group arm, according to CNBC.
