Ubisoft Engulfed in Shareholder Lawsuit Over Tencent Agreement
Stormy seas continue to engulf gaming giant Ubisoft. Adding to recent bad news – including weak game launches and stock price issues – a group of minority shareholders has decided to sue. They are irate. Their target is Ubisoft's recent purchase agreement with Chinese tech titan, Tencent.
Shareholders Join Class Action Lawsuit
These shareholders have joined hands. They filed a class action case against Ubisoft in France. The agreement between Ubisoft and Tencent is at the center of their anger. Tencent picked up a huge stake in a new Ubisoft subsidiary. The shareholders believe this agreement is not in their interest. They are demanding a significant reworking of its terms.
Calls for Revaluation and Payment of Shareholders
The shareholder group has precise needs. They are asking for a revaluation of Ubisoft's assets. They argue the assets need to be valued at no less than 4 billion euros. Of that total, they are asking for a massive 3 billion euros to be distributed to the shareholders immediately. They recommend Ubisoft use the remaining part to settle existing debts.
Resentful investors also expect to keep the power dynamic in check. They are eager to strip the voting rights of the Guimo family (Ubisoft's founders and owners) and Tencent regarding this particular deal. This action indicates mistrust and a desire to exert greater influence over the process.
Deal Devaluation and Concerns Over Control
One primary area of disagreement among shareholders is the deal with Tencent negatively impacted Ubisoft's stock value. In their opinion, the stock value's continued fall after the deal announcement proves the decision was wrong. This financial decline serves as proof to support their case. They argue the deal was not favorable for all shareholders.
The suit also alleges the Guimo family prioritized control in negotiating with Tencent. Shareholders believe the deal was structured to maintain the Guimo family's control and management grip. This control would extend even to the new subsidiary, likely excluding shareholder interests. This subsidiary currently houses some of Ubisoft's biggest franchises. These include the successful Assassin's Creed, Far Cry, and Tom Clancy's Rainbow Six franchises.
Implications for Ubisoft's Future
Ubisoft faces grave danger from its shareholders. This lawsuit can have enormous implications for the company's future. It affects its relationship with Tencent. It also impacts ownership and control over its most valuable gaming franchises.
