Vivendi Promises Not To Buy Ubisoft in Next Six Months

Won't seek board member either

Massive French multimedia company Vivendi today promised it won't try to buy Assassin's Creed and Rainbow Six developer and publisher Ubisoft or wrest control of the company for the next six months.

But in the same third-quarter earnings report, Vivendi also noted the extreme value found in video games, how well mobile game company Gameloft, which is grabbed control of relatively recently, is doing.

This dance of stockholders, a publicly-held and beloved game developer and billions of Euros has been going on for years now. Last summer, Vivendi managed to wrest control of Gameloft from the Guillemot family, which founded Ubisoft in 1986. Vivendi currently owns about 30 percent of the company, the maximum amount it can own before either selling stock or being forced to make an offer on the company under French law.

Vivendi starting investing in Ubisoft in 2015, initially saying that it was simply interested in the game maker as an investment. Soon after, though, Vivendi said it wanted to have more say in the control of the company and a seat at the board.

That news pushed Ubisoft into a public facing request for help to stave off the potential Vivendi purchase. Things seemed to come to a head last fall, when some inside Ubisoft suspected that Vivendi would try to make a move on control during 2016's annual stockholders meeting. But that didn't happen. Without the power, it seems, to grab control of the board and no interest right now in an offer, it appears Vivendi may be biding its time.

Much of Ubisoft's concern about Vivendi interest lies in its long 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.

Today's note about Ubisoft by Vivendi also reiterated the company's continued interest in gaming. 

"Vivendi’s investments in video games are generating value," according to the report. "Gameloft is the worldwide leader in mobile gaming downloads. The current unrealized capital gain on the Ubisoft investment is more than €1 billion.

"Given that this sector is the second largest in the content industry after music, the Group confirms its intention to continue to develop in this sector."

The reference to the company also noted that "in view of the opposition expressed by Ubisoft’s executive management, Vivendi will not seek representation on its board of directors."

So a stay of potential execution, it seems. And one which Ubisoft didn't fail to notice. In a comment sent to Glixel, here's what Ubisoft had to say.

“Ubisoft takes note of Vivendi’s statement. We will remain vigilant about their long-term intentions and will continue to pursue our strategy of growth and value creation in the interest of all our shareholders.”