Game-maker Ubisoft fends off Vivendi takeover, for now

[Master Disaster]

Ubisoft held a board meeting yesterday and was expecting shareholder Vivendi to launch their hostile takeover bid against the French gaming giant but in an unexpected twist Vivendi declined to take up the 2 remaining slots on the board allowing Ubisoft to fill the positions. 

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Ubisoft won a key battle Thursday at its annual shareholders meeting in its ongoing fight with Vivendi for control of the company — but the war is far from over.

 

The French video game publisher had worried that the media conglomerate, which has regularly been buying shares in the company this year, would try to insert people onto its board of directors at the meeting. However, Vivendi opted not to do so, allowing Ubisoft to fill the two openings with members of its choosing. CEO Yves Guillemot and his brother Gerard, CEO of Ubisoft Motion Pictures, also saw their board seats renewed.

 

"Today during our Annual General Meeting, Ubisoft shareholders expressed massive support for Ubisoft's strategy and management," said the company in a statement. "We remain focused on the execution of our strategic roadmap, which has already proven successful and which we are confident will continue to deliver great results and value for all of Ubisoft's stakeholders."

 

Vivendi, which has been pushing for board representation since April, proposed no resolutions at the meeting, said a spokesperson. Nor did any representatives for the company speak during the Q&A period. And because Vivendi abstained from voting on resolutions related to employee stock grants and options, said a Ubisoft representative, those resolutions failed to pass.

Ubisoft isn't out of the woods yet though, Vivendi could just be buying time to further strengthen their grip over Ubisoft before launching the hostile takeover bid. Ubisoft have said they'll sell themselves to the competition before they allow Vivendi to cease control. 

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But that doesn't mean the tensions between the two companies are easing. In fact, this could be just the beginning.

Vivendi has already out-maneuvered the Guillemot brothers for control of Gameloft, a mobile game studio, which it acquired via a hostile takeover in June. And Ubisoft officials remain concerned Vivendi head Vincent Bolloré might be considering that same approach for the larger company. (Vivendi now holds a 22.8 percent stake of Ubisoft but said on July 18 that it would not consider a full takeover bid for at least six months.)

 

To proactively combat a potential bid (and shore up support), Ubisoft has held several meetings over the past year with its top investors to lay out its earnings projections and make the case for current leadership. Last week, the Guillemot brothers bought 3.6 million shares from Bpifrance — representing 3.2 percent of the company's share capital — for $137.7 million. And it has expanded an employee stock purchase program that has raised the employee ownership in the company from 2 percent to 4 percent of outstanding shares.

 

The company has also been quite public in saying it would sell itself to a competitor before acquiescing to Vivendi control.

 

"We have Plan A and Plan B," Yves Guillemot told CNBC.com in June. "Plan A is to remain independent. Plan B is going with another group, either in the game industry or with a technology or other types of company. Those are the two options at this point and they are both still open."

http://www.cnbc.com/2016/09/29/game-maker-ubisoft-fends-off-vivendi-takeover-for-now.html

 

So I'm not big on corporate affairs but I don't see how selling up is any better than being took over, they'd lose control in both scenarios, right? 

 

Also just noticed - acquiescence? I've learned a new word today, Yay me! 

[laminutederire]

2 hours ago, Master Disaster said:

So I'm not big on corporate affairs but I don't see how selling up is any better than being took over, they'd lose control in both scenarios, right? 

The difference is that in one case you are force to go with the one taking over while in the second case you give the opportunity to better buyers to take the control and you can hope for compromises and most importantly you know you won't be forced to do what you know you absolutely don't want to do.

[suicidalfranco]

let it happen ubi, it's not like you were producing anything decent on your own. 

[Fetzie]

1 hour ago, suicidalfranco said:

let it happen ubi, it's not like you were producing anything decent on your own. 

I think one of their worries is about becoming a debt sink and/or piggy bank for Vivendi, who lost theirs when Activision Blizzard bought themselves out of the Vivendi group.

[Prysin]

hey, i know how we can solve this.

Let AMD buy em. That way, we can have more AMD biased games... I mean, last time AMD acquired a large company they had no financial issues afterwards.

[SpaceGhostC2C]

4 hours ago, Master Disaster said:

Ubisoft held a board meeting yesterday and was expecting shareholder Vivendi to launch their hostile takeover bid against the French gaming giant but in an unexpected twist Vivendi declined to take up the 2 remaining slots on the board allowing Ubisoft to fill the positions. 

Ubisoft isn't out of the woods yet though, Vivendi could just be buying time to further strengthen their grip over Ubisoft before launching the hostile takeover bid. Ubisoft have said they'll sell themselves to the competition before they allow Vivendi to cease control. 

http://www.cnbc.com/2016/09/29/game-maker-ubisoft-fends-off-vivendi-takeover-for-now.html

 

So I'm not big on corporate affairs but I don't see how selling up is any better than being took over, they'd lose control in both scenarios, right? 

 

Also just noticed - acquiescence? I've learned a new word today, Yay me! 

The main difference between sales and hostile takeovers is the position of the current management. A hostile takeover takes place against the will of the managers, implying they will be sacked by the new owners, or forced to take the company in a direction they don't approve. A sale sponsored by the managers implies that they will get to remain in charge, or that the company will take a turn they approve or at least consider the lesser evil.

From selling stockholders' point of view it doesn't matter as long as they get paid  

 

I have zero insights on Ubisoft's situation, so let me make up an example instead. Imagine a game developing company with a series of unsuccessful releases that left them short on cash. In order to continue producing games, they need to keep paying wages and other costs. The managers decide they have some great projects coming, so ask owners to provide more capital, so they carry out those projects, sell games, get fresh cash, and the wheels turn again. But the owners have lost interest in the company and don't want to invest more, or in the case of a publicly traded company, the way to collect more capital is just to issue more stocks. Let's say another company buys those new stocks, so the gaming company survives a little longer, but then these new investors decide they don't really think the ongoing projects are that interesting. Hence, they decide to buy more stocks in order to control the gaming company, and then exercise that control to change management, cancel projects, cannibalize assets, or just fire everyone and keep the intellectual property over past successful franchises. The current management team may still have faith on the ongoing projects, or just wants to stay in business rather than being emptied by the acquiring company, so they try to find alternative buyers who would keep them in charge or at least keep the company alive and producing games rather than being dismantled or forced to abandon all current projects and do completely different stuff (while getting some compensation for their services ).

 

TL,DR: what matters for the people inside the company is not whether the names of their stockholders change, but what the new owners will do with them  

[dalekphalm]

4 hours ago, Master Disaster said:

Ubisoft held a board meeting yesterday and was expecting shareholder Vivendi to launch their hostile takeover bid against the French gaming giant but in an unexpected twist Vivendi declined to take up the 2 remaining slots on the board allowing Ubisoft to fill the positions. 

Ubisoft isn't out of the woods yet though, Vivendi could just be buying time to further strengthen their grip over Ubisoft before launching the hostile takeover bid. Ubisoft have said they'll sell themselves to the competition before they allow Vivendi to cease control. 

http://www.cnbc.com/2016/09/29/game-maker-ubisoft-fends-off-vivendi-takeover-for-now.html

 

So I'm not big on corporate affairs but I don't see how selling up is any better than being took over, they'd lose control in both scenarios, right? 

 

Also just noticed - acquiescence? I've learned a new word today, Yay me! 

Just so you know, it's "seize", not "cease". Cease means "stop", so what you're saying is "before they allow Vivendi to <stop> control".

2 hours ago, suicidalfranco said:

let it happen ubi, it's not like you were producing anything decent on your own. 

You must not remember how shitty of a company Vivendi is. As bad as Ubisoft is, they're a lot better than they would be if Vivendi took control. Ubisoft still makes some interesting games now and then.

 

Personally, I'm glad that they were able to fend this off. I hope they retain creative control over their company.

[PlayStation 2]

As much as everyone wants Ubisoft to die, it would be of absolutely no benefit to us if Vivendi bought them.

[Centurius]

3 hours ago, suicidalfranco said:

let it happen ubi, it's not like you were producing anything decent on your own. 

For all the hate Ubisoft deserves, Vivendi is infinitely worse.

[suicidalfranco]

9 hours ago, Centurius said:

For all the hate Ubisoft deserves, Vivendi is infinitely worse.

And that shows how much i hate them now

 

[Magnetorheological]

Ubisoft hasn't been all that great lately, but Vivendi will almost definitely make things worse. I hope they get out of this one. Giant conglomerate overlords are never a good thing for a creative company.