Ubisoft Sells $445 Million of Bonds to Fund Game Projectsby and
Bonds are convertible into gamemaker’s shares after five years
Proceeds may be used for acquisitions, French company says
Ubisoft Entertainment SA, the French video-game maker trying to fend off the advances of Vivendi SA, sold about 400 million euros ($445 million) of convertible bonds to help finance product development and pay for possible acquisitions.
The five-year bonds were sold to institutional investors in a private placement, the Montreuil, France-based company said in a statement Wednesday.
The length of the term suggests any conversion would occur well after Ubisoft’s current battle to remain independent -- so the new stock wouldn’t be available for voting. The added funding arms Ubisoft to move ahead with its business after a potential showdown with its largest investor next week. Ubisoft’s founding Guillemot family has added to their stake ahead of a Sept. 29 shareholder meeting to fend off any Vivendi attempt to gain board seats.
Shares of Ubisoft closed down 1.7 percent to 34.36 euros in Paris. They’ve gained 29 percent this year.
With the bond sale, Ubisoft is taking advantage of low interest rates, according to people familiar with the matter. There is no link between the money-raising and the battle with Vivendi, said the people, who asked not be identified.
The Guillemot family has boosted its stake to try to keep control of the maker of Assassin’s Creed after Vivendi built up a holding of more than 20 percent.
The sale “will significantly strengthen Ubisoft’s financial flexibility” to make investments, the company said. The proceeds will be used for general purposes, including possible acquisitions, share buybacks and debt refinancing, Ubisoft said.
Ubisoft doesn’t need to raise money in the short term, Richard-Maxime Beaudoux, an analyst at Bryan Garnier & Co., said in a note. The sale is “opportunistic,” with Ubisoft eyeing mostly unlisted mobile game companies, he said.
Credit Agricole, JPMorgan Chase & Co. and Commerzbank AG managed the sale.