Guillemots Boost Ubisoft Stake to Counter Vivendi’s Advance

  • Founding family trying to keep video-game maker independent
  • Media conglomerate Vivendi has lifted Ubisoft stake above 20%

France’s Guillemot family, trying to keep control of Ubisoft Entertainment SA amid Vivendi SA’s encroachment, is boosting its stake in the video-game company with financing from an unidentified bank.

The arrangement allows the family’s company, Guillemot Brothers SE, to increase its holding by about 4 million shares, or 3.5 percent of Ubisoft, according to a statement late Monday. The chunk is worth about 144 million euros ($161 million) based on the latest close. The family held 9 percent of Ubisoft’s capital and 15 percent of the voting rights as of July.

The Guillemots are boosting their defenses ahead of Ubisoft’s Sept. 29 shareholder meeting as they try to keep the maker of “Assassin’s Creed“ independent. The family is lobbying other owners to back its campaign by pledging them better returns alone than as a unit of French media conglomerate Vivendi, people familiar with the conversations have said. Vivendi has already taken control of Gameloft SE, another company run by the Guillemot family, through a hostile bid, and in July increased its voting stake in Ubisoft to more than 20 percent.

“We are seeing a race between Vivendi and Guillemot brothers,” Charles-Louis Planade, head of research at Louis Capital Markets - Midcap Partners, said in an e-mail. “If Vivendi wants Ubisoft, it will have to pay for it.”

The Guillemots made about 130 million euros when they were forced to sell their Gameloft shares to Vivendi, and are now using those proceeds to boost their Ubisoft stake, according to Bloomberg Intelligence analysts Alex Wisch and Matthew Kanterman.

Both the Guillemots and Vivendi are trying to become stronger ahead of the shareholder meeting, Planade said. While Vivendi has asked for board seats, it also said in July it isn’t considering a full takeover of Ubisoft for at least six months. The music, film and TV conglomerate has said it wants “fruitful cooperation” with Ubisoft.

Vivendi didn’t file any resolution for the shareholder meeting by the Sept. 4 deadline, people familiar with the matter said. Vivendi can still make proposals at the meeting, one of the people said. The media company currently doesn’t plan to do so, one of the people said.

Ubisoft shares rose 1 percent to 36.90 euros at 2:14 p.m. in Paris. They have more than doubled in the past twelve months, giving the company a market value of about 4.2 billion euros. Vivendi fell 0.1 percent to 17.99 euros.

As part of the two-year pact with the bank, the Ubisoft stock is hedged and used as collateral against the loan, according to the statement.

Guillemot representatives didn’t immediately return calls seeking further details. A Vivendi spokesman declined to comment.

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