According to a Reuters report, Chinese gaming giant Tencent is seeking an additional stake purchase in Assassin's Creed and Watch Dogs developer Ubisoft, on top of the existing 5 per cent it currently owns in the company. This information comes from multiple sources, which revealed the information on the condition of anonymity.
The sources state that Tencent has reached out to Ubisoft founders, the Guillemot family, which currently hold a 15 per cent stake in the company. They also added that to ward off competition Tencent has reportedly submitted a terms sheet to the Guillemot family with a price significantly higher than the current price.
"Tencent is very determined to nail down the deal as Ubisoft is such an important strategic asset for Tencent," said one of the sources.
A bold move for a big company
According to two of the sources, Tencent could offer up to $101.84 per share – a sharp increase from the 66 euros ($67.28 at the time of writing) per share the company paid for its initial 5 per cent stake in 2018. However, details of the deal aren’t finalised and, as such, are subject to change.
The market has reacted positively to the rumoured deal, with Ubisoft stock increasing by 21 per cent to $50.01 since Reuter’s initial report – its biggest daily increase since 2004. Similarly, shares in Guillemot Corp SA – the Guillemot family’s holding company – increased by 10.3 per cent in its biggest daily increase since January.
At present, it isn’t clear how large a stake Tencent is seeking in the firm, which is currently valued at $5.3 billion. However, two sources have stated that the company is seeking to become the single largest shareholder in the French company. To achieve this, Tencent will also approach other shareholders seeking their stakes in the company.
This rumoured acquisition follows a trend of the mobile games industry has been getting more involved with the greater video games industry as a whole. Earlier this year, Take Two acquired mobile developer Zynga for $12.7 billion.
Although this deal hasn't been finalised, you can keep abreast of the latest deals and acquisitions through our dedicated tracker.