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Vivendi, Ubisoft may face-off in meeting tomorrow

Creep or hostile takeover?


The cold war between Vivendi and Ubisoft over control of the French publisher and developer of Assassin's Creed, Watch Dogs, The Division and other big games is likely to come to a head this week during Ubisoft's annual stockholders meeting.

At stake is, on the one hand, Vivendi's desire to gain some control over the operations and direction of Ubisoft, and on the other, the publisher's long-standing desire to remain independent.

Thursday's general stockholders meeting kicks off at 8:30 a.m. ET and won’t be streamed. It is scheduled to, among other things, elect two board members, increasing the total number of people on the board to ten and shifting the make-up to a board made up of half founding members and half independent members.

The new proposed board members are angel investor Frederique Dame and Florence Naviner, CFO of Wrigley.

Vivendi has expressed a desire to get its own members on the board and gain some say into the way the company is run. Vivendi also has a history of wresting control away from company founders through creeping control, a method that has Vivendi gaining influence through board members, instead of a hostile takeover.

Vivendi, an international multimedia conglomerate based in Paris, France, sold its shares of Activision Blizzard back to the company in 2013. In 2002, Vivendi purchased Massive Entertainment. Ubisoft purchased Massive in 2008.

Currently, the announced plans for the Ubisoft shareholder meeting don't include any actions or votes proposed by Vivendi, but any stockholder is able to put up a vote during the meeting without advance notice.


If Vivendi doesn't seek to get its own people on the board during this meeting, sources familiar with the situation believe there's a good chance the company will start its efforts for a hostile takeover.

Earlier this month, Guillemot Brothers SE, a company made up of the five brothers who founded Ubisoft, agreed to purchase a maximum of 4,000,008 more shares of Ubisoft, or about another 3.5 percent of the company. That is on top of the 9 percent of the company the family already owned and 15 percent of the voting rights, according to a Bloomberg report.

Vivendi, meanwhile has a 23 percent stake in the company.

Under French law, the amount of stock a person or company can hold is capped at 30 percent. If a person passes the 30 percent mark they are obliged to launch a public offer on the company.

This summer, Vivendi wrested Gameloft from the Guillemot family after first buying up 29 percent of the shares.

About a year ago, Vivendi started investing in Ubisoft shares, initially saying it was only interested in the company as a financial investment. Shortly after that early burst of investment, Vivendi said it was interested in having more say in the control of the company and wanted a seat on the board.

Sources familiar with Ubisoft's take on the dealings believe that Vivendi's only interest is in either gaining creeping control of the company through board members or, failing that, launching a takeover through stock purchases.

Yves Guillemot official headshot

Thursday’s meeting would likely identify which method Vivendi will try to use.

Speaking to the Wall Street Journal, Ubisoft president Yves Guillemot said the company won't relax until Vivendi sells its Ubisoft shares.

"The creeping control strategy implemented by Vivendi is dangerous. We think that there’s a great risk of shareholders losing value," he said.

If Vivendi were to seek control of Ubisoft through the more direct method of a hostile takeover it's likely they would have to seek assistance from another company.

Sources familiar with the situation say some early talks surrounding that potential have already started.

Ubisoft has also been busy making sure its shareholders, employees and gamers are aware of what's going on and both the successes and potential of the company as an independent developer.

The company held a media event recently at its headquarters to detail its plans and discuss where it sees Ubisoft heading. They recently announced a move to start an in-house publishing team for books based on Ubisoft properties. Earlier this week, Ubisoft announced it had acquired mobile game developer and publisher Ketchapp. Yesterday, famed Ubisoft game designer Michel Ancel took to Instagram to post artwork from the long-anticipated sequel to Beyond Good & Evil. It was the first time in eight years that the company has released new information or assets about the possible game.

Ubisoft declined to comment on the art or the timing of its release. We will have a story the moment the meeting closes and the results are in on Thursday.

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