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Ubisoft survives stockholder meeting, prepares for hostile takeover

Vivendi unlikely to give up

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Ubisoft today met the enemy and survived to fight another day. But company insiders feel that the war for control of the creators of games like Assassin’s Creed, The Division and Rayman has just begun.

The company’s annual stockholder meeting kicked off at 8:30 a.m. ET with expectations that multimedia conglomerate Vivendi, which has been growing increasingly bold in its desire to wrest control of the company away from its founders, might attempt a corporate coup.

At stake was, 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.

Vivendi had expressed publicly its desire to get its own members on the board and gain some say into the way the company is run, but it didn’t propose any resolutions before or during the meeting.

Instead, Ubisoft CEO Yves Guillemot and Ubisoft Motion Picture CEO Gerard Guillemot were both reelected to the board and two new members were elected. The two new members replaced one outgoing member and added another independent member to the board. The increase to ten board members shifted the makeup of the board to five founding members and five independent members.

Vivendi 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 the more direct, more expensive method of a hostile takeover.

Yves and Gerard Guillemot at general meeting

Although Vivendi didn’t manage to get its own people on the board during this meeting, that doesn’t mean Ubisoft’s bid to remain independent and free of Vivendi control has been accomplished. It is likely, though, that Vivendi’s methods will have to change.

That’s because the next chance to vote in or out members of the board isn’t until the next general stockholders’ meeting in a year. While Vivendi could try and win over some influence through standing members of the board, it’s more likely, according to company insiders, that Vivendi will now try the more direct route of a hostile takeover.

Publicly, a Ubisoft spokesperson focused on what they consider to be today’s good news, telling Polygon:

“Today during our Annual General Meeting, Ubisoft shareholders expressed massive support for Ubisoft’s strategy and management. We remain focused on the execution of our strategic roadmap, which has already proven successful and which we are confident will continue to deliver great results and value for all of Ubisoft’s stakeholders. We’re also very happy to welcome two new independent directors, Frederique Dame and Florence Naviner, who will bring their expertise and know-how to Ubisoft’s Board.”

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.

Ubisoft has already been courting help in case Vivendi seeks to buyout the company.

The government of Quebec has already offered assistance after an informal inquiry from Ubisoft. No formal request has yet been made though. Ubisoft employs about 2,700 people in Quebec and Montreal.

Sources say that Ubisoft is also in talks with other game publishers to seek potential support.

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