Ubisoft CEO says it’s still open to other partners after Tencent deal

Yves Guillemot, CEO of Ubisoft, speaks on stage during the Ubisoft E3 conference at the Orpheum Theater in Los Angeles, California, June 15, 2015. REUTERS/Mario Anzoni

PARIS, September 10 (Reuters) – Ubisoft (UBIP.PA)France’s largest video game maker, is still open to other partners after China’s Tencent deal (0700.HK) Co-founder and CEO Yves Guillemot said Thursday that he will raise his stake in the company.

Guillemot’s comments, made at a closed press event the company requested not to publish content ahead of Saturday’s online presentation event, followed a rough day for Ubisoft stock, which fell 17% after the group announced that Tencent would become the largest single shareholder with a total stake of 11%. Read more

The deal values ​​the Assassin’s Creed game maker at around $10 billion.

“We remain completely independent and can work with any outside company if we want to,” said Guillemot, who founded Ubisoft in 1986 with his four brothers. “That was a big negotiation with Tencent,” he added. “We can do whatever we want.”

Traders and analysts said the Tencent deal, which sees the world’s largest gaming company by revenue enter into a shareholder agreement with Guillemots, has removed the speculative appeal of Ubisoft shares.

The group has long been seen as a takeover target with Guillemots holding a minority stake in the group. However, the Guillemot brothers managed to fend off a raid by French businessman Vincent Bollore via his Vivendi media group. (VIV.PA).

Vivendi acquired smaller video game maker Gameloft, formerly led by Yves Guillemot’s brother Michel, six years ago.

The secret siblings, sons of agricultural traders from a small town in Brittany in western France, have vowed to protect their independence, a goal that Yves Guillemot, 62, reaffirmed on Thursday. “Our first intention is to own our destiny,” he said.

important progress

That possibility was recently tested by a combination of poor financial results and allegations of sexual harassment, leading to renewed corporate governance and pledges to change a company culture that some former employees described as sexist.

Yes, we stumbled and we acknowledged it, said Guillemot. “We have learned a lot along the way and made meaningful progress through concrete action plans collectively led by our leaders.”

Ubisoft burned approximately €200 million in operating cash during the 2020/2021 fiscal year, generating 169 million in operating cash flow in the previous year.

The company’s financial problems came on top of several delays in the release of new video games and mounting pressure on management, in the midst of the boom, mergers and acquisitions in the video game industry.

It was particularly marked by Microsoft’s plan to acquire Call of Duty maker Activision Blizzard for $69 billion.

As part of its plan to return to growth, Ubisoft aims to roll out its three “pillars” games — “Assassin’s Creed,” “Far Cry,” and “Tom Clancy’s Rainbow Six” — on all digital platforms, Guillemot said.

Guillemot said the group aims to have these three brands reach a total of €2 billion in annual revenue within five years.

Guillemot said that “Assassin’s Creed” will release its next version, “Mirage” in 2023. Ubisoft is also partnering with streaming platform Netflix (NFLX.O) To develop three original mobile games, including one based on Assassin’s Creed.

(Reporting by Matthew Rosemin) Editing by David Holmes

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