Ubisoft Shares Jump on Report of Tencent, Guillemot Family Buyout

By Mauro Orru

Shares of Ubisoft Entertainment surged Friday after a Bloomberg report said Chinese internet giant Tencent Holdings and the Guillemot family were considering a potential buyout of the Assassin's Creed maker.

Bloomberg reported that Tencent and the Guillemot family that founded Ubisoft in 1986 were consulting advisors to take the company private, citing people familiar with the matter.

Ubisoft declined to comment. Tencent didn't respond to a request for comment.

Ubisoft shares in Paris jumped more than 30% on the news. However, the stock is still down more than 50% over the last 12 months. The group has been grappling with an increasing number of challenges lately.

The company last week lowered its sales and profit forecasts for its fiscal year, a decision it made after a delay in the release of "Assassin's Creed Shadows" and weaker-than-expected sales of "Star Wars Outlaws."

Ubisoft said in July that it no longer expected to release "Rainbow Six Mobile" and "The Division Resurgence" in the fiscal year to the end of March 2025 as it sought extra time to ensure the games meet players' expectations. Those delays came after the group ceased development of "The Division Heartland," a decision it made to redeploy resources to bigger releases such as "XDefiant."

Meanwhile, Ubisoft is facing added pressure to go private after AJ Investments, a hedge fund based in Slovakia that holds less than 1% in Ubisoft, said in a follow-up letter to management last week that it had gathered support from 10% of Ubisoft's shareholders in its quest to take the company private through a sale.

The hedge fund sent an initial letter to Ubisoft management last month, saying it was unsatisfied with the current performance and strategic direction of the company. Juraj Krupa, founder and chief executive of AJ Investments, said at the time that he wanted the letter to be a wake-up call for other investors.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 04, 2024 11:04 ET (15:04 GMT)

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