LogInThe drama surrounding Ubisoft's deal with Tencent – under which the Chinese tech giant would effectively "own" 25% of Ubi's biggest franchises – continues with a new, albeit somewhat expected, twist, as minority shareholder AJ Investments, along with a coalition of investors, announces the initiation of legal proceedings in France aimed at renegotiating the deal.
According to an open letter to Ubisoft obtained by Insider Gaming, the investors are uncertain about gaining any significant benefit from the deal, arguing that the creation of the new subsidiary is structured to circumvent mandatory public offer rules and is designed to solidify control by the Guillemot family, despite their holding now being less than 10% of the company's economic interest. The studio's shares falling over 20% since the deal was announced also hasn't done much to inspire confidence in investors, some of whom now view the agreement as flawed.
In light of this, AJ and the shareholders are urging a French court to force Ubisoft to hold an Extraordinary General Meeting, allowing all shareholders to vote on two key resolutions. The first proposes restructuring the IP spin-off deal into a direct asset sale to Tencent for no less than €4 billion. The second calls for the distribution of an Extraordinary Dividend, ensuring that after the sale, Ubisoft returns €23 per share in cash to shareholders (totaling €3 billion) while retaining €1 billion to cover its remaining corporate net debt.
Additionally, the coalition will seek a ruling to exclude Tencent from voting due to its direct interest in the transaction's outcome and to restrict Guillemot Brothers Holding's voting rights to only their shares not linked to Tencent.
"We suggest that management explain the benefits of the deal to the shareholders in detail (not 2 A4 pages from where many details are not clear), as the owners of the business, and we will have a vote on it," investors write. "Sell the core IPs to Tencent as a whole, or sell them the 25% stake in a subsidiary that was already announced. Shareholders will choose what they prefer. We call on all minority shareholders to join us now in this legal effort to protect value and demand accountability. The time to act is today – before the damage becomes irreversible."
Interestingly, the open letter arrives almost simultaneously with revelations that Ubisoft currently lacks a concrete plan or roadmap for the Tencent deal, planning to come up with a solid plan by summer.
Coupled with the company's stock continuing its downward spiral and shareholders now advocating for the outright sale of the Assassin's Creed, Far Cry, and Rainbow Six franchises to Tencent, the situation paints a picture of utter turmoil within the studio, making one wonder whether it is just a temporary turbulence or whether we are truly witnessing the end of Ubisoft.
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