Ubisoft appoints advisors to explore options for a potential buyout
Ubisoft, the owner of the popular game Assassin’s Creed Shadows, announced it had appointed advisors to look at “strategic” options for a potential buyout deal.
Ubisoft announced that it had appointed advisors to explore strategic options for the company, allegedly related to a potential buyout deal.
“The company has appointed leading advisors to review and pursue various transformational strategic and capitalistic options to extract the best value for stakeholders,” said the press release on Thursday.
The French video game company will also further delay its Assassin’s Creed Shadows title for another month to 20 March, “as part of the renewed focus on gameplay quality and engaging Day-1 experiences”.
The game had been postponed to February after it was originally scheduled for release in November last year.
Tencent may pursue a private takeover
The decision to appoint advisors came a few months after Bloomberg reported that Tencent and the Guillemot family were considering taking the company private in October.
Tencent, the largest Chinese social platform and gaming giant, holds 9.99% of Ubisoft’s stake after buying 49.9% of holdings from the founding family, the Guillemot Brothers Ltd.
The deal allows the Guillemot family to remain in control of the company’s governance. Tencent cannot sell its shares in Ubisoft for five years agreed, according to the report.
The latest announcement may indicate that the French company has made some progress with either Tencent or other parties in the potential takeover deal.
In the statement, it said: “This process will be overseen by the independent members of the Board of Directors. Ubisoft will inform the market in accordance with applicable regulations if and once a transaction materializes.”
However, CEO Yves Guillemot and CFO Frederick Duguet did not provide any details about the potential deal.
“So we are currently actively exploring different options. And we can’t say more,” Duguet said when answering questions regarding the possible Tencent takeover.
Ubisoft downgrades guidance further
The French video game company encountered a sharp decline in revenue and profit margins in the September quarter, with its stock plunging 44% in 2024.
Its share price plunged to a decade-low in early October after it cut its full-year outlook amid weaker-than-expected quarterly results.
In Thursday’s announcement, Ubisoft downgraded outlooks further, following a major cut in September.
The company is now expecting fiscal third quarter net bookings to be €300mn from the previously projected €380mn, “primarily reflecting lower than expected Holiday sales, mainly for Star Wars Outlaws, as well as the discontinuation of XDefiant”.
ADVERTISEMENTThe company also cut the next bookings to €1.9bn for the fiscal year 2025, down from €1.95bn set in September.
In September, Ubisoft cut its outlook for the fiscal year 2025 which ends in March, expecting bookings of €1.95bn, compared with €2.3bn in fiscal 2024.
Previously, the company expected “solid growth” and analysts looked for net bookings of €2.42bn.
It also downgraded expectations for the September quarter to the range of €350mn to €370mn, down from a forecast of around €550mn.
ADVERTISEMENTThe company said: “The revised targets are mainly a reflection of decisions taken for Assassin’s Creed Shadows and the softer-than-expected launch for Star Wars Outlaws.”
Ubisoft reported net bookings of €642mn in the first half of fiscal 2025, down 22% from a year ago, partially due to underperformance in the new releases, particularly Star Wars Outlaws.
It has also reported a negative free cash flow of €126mn.
“The company will continue to drive significant cost reductions, together with a highly selective approach to investments, and now expects to exceed €200 million in reduction of its fixed cost base by FY2025-26 vs. FY2022-23 on an annualized basis,” said the statement on Thursday.
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