In one of the ongoing business conflicts in the gaming industry, Vivendi has continued buying up more shares of Ubisoft despite the latter's vocal protests. After purchasing out Gameloft and getting the Guillemot family to sell the remaining shares in it, Vivendi spent more of its money to cross the important 20% mark of ownership in Ubisoft, including nearly 18% voting rights.
At 20%, according to French law, the multi-media giant had to explain what its objectives were over the coming 6 months to the French securities. Here's a brief rundown of what they put in:
- They have been using disposable cash
- They are not acting with any third party
- They are considering buying further shares depending on market conditions
- However, they are not considering a public tender or acquiring control of Ubisoft
- Vivendi wants board seat(s) consistent with its shareholder status
- Finally, and one point that may raise some eyebrows as Vivendi says it's, "part of a strategic vision of operational convergence between Vivendi’s content and platform and Ubisoft’s productions in the field of video games".
However, Ubisoft does not appear to be happy with this state of affairs. While we have seen them speak out against Vivendi before, they are adding some actions to that now. In addition to considering investing their Gameloft sales in acquiring more shares, Ubisoft has created an employee shareholding operation called UBI's MMO PLAN 2016. Essentially this allows employees to buy shares in the company and support it as they offer shares that Ubisoft bought back starting in September 2015. The offer is open for a while, with an expected end of August 19th and there are some conditions applied to it. There is a minimum investment amount of 25 Euro and no person can invest more than one-quarter of what they earn. The number of shares available is relatively small, with only 3% of the company's share capital available in this way but that equates to 3,371,634 shares overall and they are available at a 15% discount for the employees in share price.
Additionally, Yves Guillemot, the co-founder, and CEO of Ubisoft has said that while their first plan of action is to remain totally independent, they do have a Plan B in place. While their primary plan has them working with investors to get them on board to fight off Vivendi, their secondary plan would be merging with another group such as a gaming or technology firm. Guillemot has maintained that Vivendi is incompatible with Ubisoft, perhaps because of his views that Vivendi doesn't know the industry and is older in mindset.
A reader asked who Vivendi is and we realized that we left that out, so here's a quick primer on who they are. Vivendi is a large multi-media company that owns numerous properties, staying behind the scenes typically. They previously owned Activision-Blizzard, until they bought themselves out when Vivendi had some monetary issues. Some of the properties they own include the Universal Music Group, streaming site Dailymotion and the Canal+ group - which is the largest French Pay TV provider, and owns Studio Canal which has the world's third-largest film library.
There are others, but those three provide an idea of just how big Vivendi is as a company.
This situation is fascinating to watch evolve overall as Vivendi moved faster on Gameloft than anyone expected and while it's saying it will not take over Ubisoft, its actions make one wonder there. It puts a lot of pressure on Ubisoft to keep performing commercially with their games as any failure may rock shareholder confidence and that's the last thing they need with Vivendi right there poised to potentially exploit it. It's also important to note that the Vivendi objectives are over the next 6 months, thus it may be looking in the longer or midterm at a takeover if Ubisoft doesn't co-operate with it.