Tencent Increases Ubisoft Stake

Ubisoft is feeling more of the grasp of Tencent's tentacles, announcing the Chinese conglomerate is now owner of a minority stake in Guillemot Brothers Limited, itself the largest stakeholder in Ubisoft. Word is Tencent now owns a 49.9% economic stake and a 5% voting share in Guillemot Brothers, which set it back a cool €300 million (around USD$297M). Here are the full details of the transaction:
Tencent acquires a 49.9% economic stake with 5% voting rights in Guillemot Brothers Limited

Tencent's investment in Guillemot Brothers Limited amounts to €300 million (€200 million share acquisition and €100 million capital increase), at an implied valuation for Ubisoft of 80€ per share

In addition, Tencent is providing Guillemot Brothers Limited with a long-term unsecured loan to refinance its debt and provide additional financial resources that can be used to acquire equity in Ubisoft.

Guillemot Brothers Limited remains exclusively controlled by the Guillemot family. Tencent will not be represented on its Board of Directors and will not obtain any consent or veto rights over the business.

Expansion of Ubisoft founders’ concert
The Guillemot family concert with respect to Ubisoft is extended to include Tencent.

The expanded concert may increase its stake to 29.9% of Ubisoft's capital or voting rights. Within this limit, Guillemot Brothers Limited and the Guillemot family may each increase their equity ownership in Ubisoft. Additionally, Ubisoft’s Board of Directors has authorized Tencent to increase its direct stake in Ubisoft from 4.5% to 9.99% of the capital or voting rights. Tencent will not be able to sell its shares in Ubisoft for a period of 5 years (and beyond will give the Guillemot family a right of priority) and will not be able to increase its stake in Ubisoft beyond 9.99% of Ubisoft's capital and voting rights for a period of 8 years.

As a result of this transaction, Ubisoft's governance will remain unchanged and Tencent will not have any operational veto rights.
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