EXCLUSIVE Tencent is seeking to enhance its stake in Murderer’s Creed maker Ubisoft – sources

HONG KONG, August 4. (Reuters) – Tencent Holdings Ltd (0700.HK) plans to increase its stake in French video game group Ubisoft Entertainment SA (UBIP.PA) As the Chinese gaming giant pivots to the global gaming market, four sources with direct knowledge of the matter told Reuters.

China’s biggest social networking and gaming company, which bought a 5% stake in Ubisoft in 2018, has reached out to the French firm’s founding Guillemot family and expressed interest in increasing its stake in the company, the sources said.

It’s unclear how much more Tencent wants to own Ubisoft, which is valued at $5.3 billion. USD, but Tencent is seeking to become the single largest shareholder in the French company by acquiring an additional stake, said two of the sources, who spoke on condition of anonymity.

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Tencent hopes to buy an additional stake in Ubisoft, maker of the popular Assassin’s Creed video game franchise, from the Guillemot family, which owns 15% of the company, three of the sources said.

Tencent may offer up to 100 euros ($101.84) per share to acquire an additional stake, two sources with knowledge of internal discussions said. For a 5% stake in 2018 paid 66 euros.

According to the sources, the details of the deal are not yet final and are subject to change.

Ubisoft shares rose 16% after Reuters reported its biggest daily gain since 2010.

Shares of Guillemot Corp SA (GTCN.PA)the holding company, which is majority owned by the Guillemot family, saw trading rise by more than 7%.

Tencent will also seek to buy shares from Ubisoft’s public shareholders, two of the sources said, in a bid to increase its ownership and become the single largest shareholder.

According to its latest annual report, around 80% of the French company’s shares are owned by public shareholders.

All the sources declined to be named because they are not authorized to speak to the media.

Tencent and Ubisoft declined to comment.

Representatives for the Guillemot family could not immediately be reached.

The planned stake acquisition is Tencent’s latest major overseas deal after 2020. regulatory crackdown at the end of the year will help offset some of the pressure on the domestic gaming market. China’s video game market, which is the largest in the world, has become fiercely competitive.

“Tencent is very committed to closing the deal because Ubisoft is such an important strategic asset for Tencent,” one of the people said.

Tencent’s offer of 100 euros per share represents a 127% premium to the average share price of 44 euros over the past three months and is close to the historic price ceiling of 108 euros in 2018.

Tencent submitted a term sheet to the Guillemot family – a non-binding proposal outlining the key terms of the investment – at a price “well above” the company’s current price to ward off potential competition, one of the sources said.

The aggressive bid comes as global gaming powerhouses have rushed to find quality independent game makers in recent years, which have been in short supply, two of the sources said.

Senior Tencent executives flew to France in May to meet with the Guillemot family about the purchase, two of the people said.

HOUSEHOLD PRESS

China’s gaming regulator has not issued any new home gaming licenses to Tencent since June last year, before it froze gaming licenses for nearly nine months. Because in April of this year the approval was renewed, the company was not included in any of the last four batches. read more

In May, Tencent reported that its domestic gaming revenue fell 1% in the first quarter, while international gaming revenue rose 4%.

Tencent, which owns stakes in US video game developers Epic Games and Riot Games, announced in June that it would release its flagship mobile game Honor of Kings globally by the end of the year. read more

in 2016 it costs approximately 8.6 billion USD has acquired a controlling stake in Clash of Clans mobile game maker Supercell in one of the biggest gaming deals in the world.

It also owns 9% of UK video game company Frontier Developments and last year said it would buy another British developer, Sumo, in a deal worth £1.3bn. read more

Ubisoft, whose titles also include Prince of Persia and Rainbow Six, in May forecast a lower operating profit for 2022-2023 as the company reported 2021-22. operating income that missed forecasts. read more

(1 dollar = 0.9819 euro)

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Additional reporting by Pamela Barbaglia in London, Sudip Kar-Gupta and Richard Lough in Paris, graphics by Julien Ponthus; edited by Sumeet Chatterjee and Jason Neely

Our standards: Thomson Reuters Trust Principles.

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