Ubisoft’s Vivendi Defense Is Said to Gain Investor Support

  • Founder Yves Guillemot courted investors at E3 in Los Angeles
  • Family said to plan more stock purchases to stay independent

Ubisoft Entertainment founder Yves Guillemot is lobbying institutional shareholders to support his rebuttal of Vivendi SA, telling them his video-game company can offer them better returns alone than as a unit of the French media conglomerate, people familiar with the conversations said.

To help their case, the Guillemot family plans to buy more Ubisoft stock, said the people, who asked not to be identified because the plans are private. Guillemot, whose clan hold 9 percent of the capital and 15 percent of the voting rights, used an industry conference in Los Angeles last month to lay out his approach to investors, and his plan is gaining traction, the people said. The stock rose 4.5 percent to 35.54 euros at the close in Paris.

Shareholder support is crucial if the company that created Assassin’s Creed and Tom Clancy’s The Division is to stay independent. Vivendi has already taken control of Gameloft SE, another company run by the Guillemot family, and on Monday increased its voting stake in Ubisoft to more than 20 percent. While Vivendi has asked for board seats, it also said 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.

Ubisoft chief financial officer Alain Martinez on Tuesday said the company has had regular contact with Ubisoft’s shareholders, that they support its strategy and that they don’t want to change the way the business is run.

"They’re not convinced by potential synergies or fruitful collaborations announced by Vivendi, and neither are we,” Martinez said of shareholders on a conference call to present first-quarter sales at the company. "They consider that if this strategy is properly executed, it should continue to create value.”

The supportive reaction from institutional shareholders has given the Guillemot family more confidence that it may no longer need a white knight to fend off the unwelcome embrace of Vivendi and its chairman, Vincent Bollore, the people said.

A Ubisoft representative declined to comment.

The Ubisoft investment “is part of a strategic vision of operational convergence between Vivendi’s content and platform and Ubisoft’s production in the field of video games,” Vivendi said in a statement. Vivendi has 22.8 percent of Ubisoft’s capital.

The Guillemots’ case for independence grew stronger on Tuesday after the company said fiscal first-quarter sales advanced 44 percent to 139.1 million euros ($153 million), topping its own prediction of revenue of about 125 million euros. Ubisoft reiterated its full-year forecasts. The Division, released in March, grossed more than $330 million worldwide in its first five days. At June’s Electronic Entertainment Expo in Los Angeles, Yves Guillemot told investors that Ubisoft can grow and create value without Vivendi, according to the people.

Another consideration for some shareholders is whether Vivendi can bring its video-game ambitions to life. Walt Disney Co. recently closed down its Infinity video-game business. Vivendi itself has struggled to turn around its Canal Plus pay-TV unit, and faces difficulties with its Dailymotion website.

"We see limited synergies between Ubisoft and Vivendi, ” Berenberg analyst Robert Berg said in an e-mail. “We believe Ubisoft would be better off independent as a deal between both companies would most likely be value destructive for Ubisoft shareholders.

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