A group of minority shareholders led by investment company AJ Investments has sent an open letter to French publisher Ubisoft demanding that it reconsider its recent agreement with Chinese IT giant Tencent.
Image source: Ubisoft
Recall that Ubisoft is planning to open a €4 billion subsidiary that will include its three largest franchises: Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six. Tencent will invest €1.16 billion in the structure to purchase 25% of the shares.
According to Insider Gaming, AJ Investments is demanding that Ubisoft call an extraordinary general meeting to give investors the opportunity to vote on two issues regarding the deal.
Image source: Ubisoft
Firstly, the shareholders insist on revising the agreement and restructuring it into a direct sale of assets for at least €4 billion. AJ Investments notes that investors at this stage do not understand what benefit the deal will bring them.
Secondly, shareholders are counting on dividends following the deal – €23 per share (€3 billion in total). For comparison: at the time of publication, the value of Ubisoft securities is slightly more than €10 per unit.
Image source: X (CelPsych)
AJ Investments intends to pursue its demands through the French courts. The market reaction (a drop in Ubisoft shares of more than 20%) since the announcement has shown investors that the deal contains “serious flaws.”
Ubisoft’s management has previously admitted that at this stage it does not have a clear plan for how the new structure will interact with the existing company, and what operating model should be adopted in the future.