Tencent is in discussions to acquire a larger share in Ubisoft

Tencent is in discussions to acquire a larger share in Ubisoft ...

Tencent's senior executives met with Ubisoft's founding Guillemot family in May to discuss purchasing an additional share in the company, according to reports. It isn't clear how much more Tencent wants, but it wants to become Ubisoft's single largest shareholder.

The details of the purchase aren't yet final, but Tencent is making an aggressive offer at a premium. Ubisoft's stock price over the last three months was 44 euros, but Tencent is offering 100 euros per share. In 2018, the Guillemot family owned 15 percent of Ubisoft, while public shareholders held around 80 percent.

Tencent's ownership of the majority of Ubisoft might be a strategy to expand its gaming presence internationally via lucrative revenue streams. The company has recently been subject to regulatory restrictions in its domestic Chinese market.

China imposed a limit on gaming for those under the age of 18, only allowing for a few hours of play a week last August, but Tencent said it does not anticipate such a change.

Due to China's strict NFT rules, the company had to also phase out its NFT ambitions in the country last summer. China approved games again in April, but none from Tencent.

Together with Logitech, the company is developing a cloud-based gaming handheld that will launch later this year, which would allow users to play games through streaming services like Xbox Cloud Gaming and Nvidia GeForce Now.

Ubisoft has had its own challenges recently. Last month, the company had to cancel four games, including a free-to-play Ghost Recon, a virtual reality Splinter Cell game, and two unannounced titles. During the same earnings call, the company announced the delay of its upcoming Avatar game and another unannounced project until 2023-24.

Several investment companies hoped to take over Ubisoft in April, including Blackstone, KKR & Co., and others. However, it isn't clear whether or not Ubisoft is interested in a buyout.

The publisher is expected to unveil its next Assassin's Creed game in September. Mario + Rabbids Sparks of Hope and Skull & Bones are two of Ubisoft's most anticipated releases this autumn. The former went through a lengthy five-year development process.

Tencent owns all of Riot Games, 40 percent of Epic Games, nine percent of Frontier Developments, and a majority stake in Clash of Clans creator Supercell.

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