Gameloft Shares Surge on Vivendi's Hostile Takeover Offer

  • Offer sets up clash with gamemaker's founding Guillemot family
  • Stock trading above bid suggests Vivendi may have to pay more

Gameloft SE jumped in Paris trading after media conglomerate Vivendi SA said it planned to make a hostile takeover offer that values the mobile-game maker at 513 million euros ($570.4 million), setting up a clash with the company’s founders.

Vivendi plans to offer 6 euros a share for the remaining stock now that it has built a stake of more than 30 percent, the Paris-based company said in a statement late Thursday. The stock advanced 16 percent to 6.37 euros at 9:25 a.m. in Paris, a sign that traders expect Vivendi to have to raise the bid.

Vivendi began investing in Gameloft late last year, saying at the time it didn’t rule out a takeover should attempts to collaborate with the game developer fail. Vivendi also bought 15 percent of the larger Ubisoft Entertainment SA -- the creator of Assassin’s Creed. Gamelot and Ubisoft, both led by the Guillemot brothers, have resisted what the family called a “creeping takeover.” Acquiring Ubisoft is Vivendi’s ultimate goal, Richard-Maxime Beaudoux, an analyst at Bryan, Garnier & Co. in Paris, wrote in a report Friday.

“The hostile takeover bid on Gameloft is a first phase to force a discussion with the Guillemot family and finally come to a friendly takeover on Ubisoft,” Beaudoux said. “But to succeed, we believe Vivendi has to be more generous.” He said Vivendi will have to offer at least 6.70 euros a share to persuade investors to tender their shares.

The offer for Gameloft is 9.5 percent above the company’s closing price Thursday, and 50 percent above where it traded in October, just before Vivendi began buying shares.

Ubisoft gained 5.8 percent to 23.60 euros, valuing the company at 2.6 billion euros. Vivendi climbed 0.5 percent to 18.24 euros, for a market value of about 25 billion euros.

Gameloft’s board will meet next week and a statement will follow that meeting, Gameloft said in a statement late yesterday. The company said no further comments would be made in the meantime.

Guillemot Clash

The offer adds to the tension between the Guillemot brothers and Vincent Bollore, the billionaire with an activist-investor past who now runs Vivendi. Vivendi, with assets including the French pay-TV station Canal Plus, has also acquired over 20 percent of Telecom Italia SpA as it seeks more influence in both content creation and distribution.

Gameloft and Ubisoft compete with market giants Activision Blizzard Inc. and Electronics Arts Inc. Vivendi, which used to control Activision Blizzard, sold its stake over the past two years. 

The Guillemot brothers own minority stakes in Ubisoft and Gameloft. The family increased its Gameloft voting stake to 25 percent late last year, saying it would take the necessary measures to avoid a creeping takeover.

In October, Vivendi spent almost $500 million acquiring 10 percent of each company. Only after the unsolicited approach on Ubisoft did Bollore get in touch to discuss possible synergies, Ubisoft Chief Executive Officer Yves Guillemot said in a Bloomberg News interview that month. “What Vivendi is doing, it shows a lack of respect for what Ubisoft is today and for all our shareholders,” he said at the time.

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