Ubisoft, Gameloft Shares Surge After Vivendi Acquires Stakes

  • Vivendi revisits video games after cutting back on Activision
  • Company invests $183 million from its $10 billion cash pile

Ubisoft Entertainment SA and Gameloft SE shares jumped in Paris trading after Vivendi SA, the French media company with a $10 billion cash pile, bought minority stakes in the video-game developers for about 160 million euros ($183 million).

Vivendi acquired a 6.6 percent stake in Ubisoft for 140 million euros, and a 6.2 percent holding in Gameloft for 19.7 million euros. Ubisoft jumped as much as 14 percent in the French capital, while Gameloft surged as much as 17 percent.

The investments -- which both targets said were unsolicited -- show renewed interest from Vivendi in the video-game industry, after it gradually sold shares in Activision Blizzard Inc. over the past two years to retain only a 5.7 percent stake as of June.

Under Chairman Vincent Bollore, who is also the company’s biggest shareholder, Vivendi has accumulated 9 billion euros in cash after disposing of telecommunications assets in countries including France and Brazil -- only to come back to phone companies a few months later. It now owns almost 20 percent of Telecom Italia SpA and ultimately wants to influence its strategy and initiate changes, people familiar with his plans have said.

With blockbuster titles like Assassin’s Creed and Rainbow Six, Ubisoft is fighting to woo consumers from market giants Activision and Electronic Arts Inc., each about 10 times its size relative to its 2.7 billion-euro market capitalization. Like rivals, it’s been experimenting with alternative revenue sources -- from subscriptions to toys and animated television shows in Ubisoft’s case -- to diversify beyond traditional game console discs. Gameloft, which is smaller, focuses mostly on mobile-phone games.

"We reiterate our intention to remain independent," Ubisoft and Gameloft said in separate releases.

Ubisoft shares rose 13 percent to 24.22 euros at 10:13 a.m. in Paris, taking their gains this year to about 60 percent. Gameloft traded 14 percent higher at 4.55 euros, for a 36 percent increase this year. Both companies were created by the Guillemot brothers, who still run them and own minority stakes in each.

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