Ubisoft To Buy Back 4 Million Shares To Hold Off Potential Vivendi Takeover

Ubisoft have announced steps to delay a potential takeover bid from French media company Vivendi. It’s the latest manoeuvre from the publisher in a long running saga that has seen Vivendi gradually buy up more and more Ubisoft shares over the past two years, while Ubisoft have repeatedly stated that these advances are unsolicited and unwanted.

In a statement to investors, Ubisoft have stated that they’re going ahead with a share buyback plan that was approved at a shareholder meeting in September. It will see them purchase 4 million of its own shares, or 10%, and then retire them, making them unavailable for purchase by Vivendi or anyone else.

Vivendi currently holds a 27% share of Ubisoft and would be required under French law to make a takeover bid if it gains 30%. Buying back these shares wouldn’t stop Vivendi from gaining those 3% it would need if they want to, but puts it just that little bit further away.

Strangely enough, Bloomberg have reported that AGM, Vivendi’s parent company, don’t really know if they want to buy Ubisoft, making this like a bizarre and stupid game of corporate gods toying with beings smaller than themselves.

via GamesIndustry.biz

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  1. Forgive my ignorance but if V hold 27% of the total shares, then Ubi buy 10% of the total and nerf them, then V would then hold 30% of the new amount of shares?

    My simplified maths was:
    100 shares exist, V hold 27
    Ubi buy 10 and burn them.
    Now 90 exist and V hold 27 still, but that’s 30% of 90.
    Or is it that V only have 24.5 shares (27% of 90)

    My brain hurts now.

    • Aye, I’m confused too.
      As you say, when talking percentages, if you reduce the number of shares available, your percentage owned goes up.

    • Your maths appears to be correct. They’ve gone from 27 to 30%.

      But that only works if the 10% Ubisoft are buying back to retire aren’t owned by Vivendi. Perhaps they’re idiots and sold some of them back to Ubisoft? So they’ve now got less than 27 of those 90 shares?

      They could now have anywhere between 19 and 30% of the new total number of shares.

      Or maybe there’s some sort of legal thing and they’re buying back 10% of the shares from everyone? So they take 10% of the total Vivendi own.

      Which gives them 24.3% of the new 90% total. Or 21.9%.

    • So, I believe this works on a number of levels, now that I’ve looked into it a bit more. Firstly, Ubisoft are buying up to 10% at any point between now and 29th December, but won’t necessarily go as far as to push Vivendi over the 30% mark. However, the share buyback will push the value of shares up, both because there’s now fewer shares to represent the company’s value and because there’s been a huge buy which will just naturally increase their value through demand. Not only that, but Ubi will be throwing over €250 million at this, which will either reduce the amount of cash in their reserves or see them take on a lot of debt. Both of these would be offputting for Vivendi.

      In some ways, it’s Ubisoft telling Vivendi to put up or shut up. It’s been a noose around Ubisoft’s neck for far too long and seeing as Vivendi reportedly aren’t even sure they want to buy Ubisoft, it could send them on their way. It could even be that Vivendi let Ubi buy up part of their 27%, so they can start backing away right now.

      • Hello, Business Bear here back from holiday. It’s a little more complicated, although Vivendi hold 27% of shares they only hold 25% of voting right rights, as they voting rights of the shares changes depending on how long you have held them. It’s this percentage that Vivendi needs to get to 30%, not the actual percentage of shares.

        So be retiring 10% of shares, Vivendi go up to about 27.7% of voting rights, and the other 75% of voting rights goes up to 83%. Then it all gets rebalannced a bit (cos cant be more than 100%) and Vivendi’s share drop back down a bit.

        However, none of this makes any difference as around Christmas Vivendi’s voting rights will increase as they have held the shares for a long time, so they will go past 30% anyway. There’s literally nothing Ubisoft can do to stop this…

        Apart from spend a fuck load of money and make a massive dent in their finances to make they company unattractive, and in the process make their share price rocket up so they are more expensive to buy. So that’s what they’re doing, essentially blowing a load of cash to make Ubisoft a poor investment for a lot of money.

        Their gamble is Vivendi will look at the balance sheet and share price, and decide that a takeover is a bad idea. Then Vivendi will dump their shares and Ubi can buy some of them back.

        Downside is that if that happens Ubisofts share price may take a dive which is bad news for investors, but good news for Ubi as they can snap up their shares cheap, and Ubi seemed to have convinced the other share holders this dip will be small/short enough to take the gamble.

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