HomeNews
Ubisoft investor wants to dethrone Ubisoft’s founders so Ubisoft can lay more developers offTencent and the Guillemots are holding shareholders “hostage”
Tencent and the Guillemots are holding shareholders “hostage”
Image credit:Rock Paper Shotgun/Ubisoft
Image credit:Rock Paper Shotgun/Ubisoft
Commence Star Wars rolling prologue screen: A minority Ubisoft investor has written an open letter to Ubisoft’s board outlining their “deep dissatisfaction with the current performance and strategic direction of the company” and threatening a full-blown coup against the Guillemot brothers, Ubisoft’s founders, and their backers at Chinese juggernaut Tencent.
AJ Investments are even now talking to other shareholders with a view to overthrowing the Guillemots. They’re going to “use the French minority law to collect enough shareholders to start a proxy fight and initiate SALE PROCESS of Ubisoft to increase shareholder value for all shareholders”. In particular, Krupa is calling for long-term CEO Yves Guillemot to be given the boot.
“The main reason why the valuation is so low compared to the peers is that Ubisoft at current state is mismanaged and shareholders are hostages of Guillemot family members and Tencent who take advantage of them,” the letter reads. “Management is focused on pleasing investors with beating quarterly results and not focusing on long-term strategy to provide exceptional experience for the gamers.”
AJ Investments appear to be new kids on the block as Ubisoft minority shareholders. According to Krupa, “we started our Ubisoft position couple weeks ago and are still adding to it”. They do, however, boast of their “extensive knowledge about the gaming industry” after being a “long-term shareholder in Activision Blizzard”.
“We cannot understand the decision-making process of current management that is focused on releasing multiple average games per year that are harming Ubisoft’s reputation among gamers community instead of focusing to provide hit games within its exceptional franchise portfolio,” Krupa’s letter continues. There follows a breakdown of Ubisoft’s handling of their games which, frankly, reads like a frothing forum post full of gamer punditry:
Krupa, you debonair chancer, you Machiavellian oaf! Forget going toe to toe with the Guillemot dynasty - describing 7/10 as a “quite good rating” is how wars get started. Also, you forgot to mentionBeyond Good & Evil 2.
AJ Investments believe that Tencent and the Guillemot family are keeping the share price low so that they can scoop up shares on the cheap and eventually take full control of Ubisoft. While he doesn’t say that it’s a deliberate part of this strategy, Krupa suggests that delaying games is “beneficial” for Tencent and the Guillemots on this count.
“The company needs to implement significant cost reductions and staff optimization to improve operational efficiency,” Krupa adds. “We also suggest that Ubisoft should consider selling certain studios that are not needed for development of main IP’s in the portfolio. Ubisoft has over 30 studios, it’s obvious to every investor that this structure is too large for Ubisoft and its profitability going forward.” He acknowledges “thelayoffsthat Ubisoft has made in the recent years which accounted to approximately of 10% cut of workforce but that is simply not enough.”
Beyond that, AJ Investments want Ubisoft’s current management gone, with the Guillemots continuing in “an advisory capacity” alongside a new, more “efficient” CEO. They also want Ubisoft to go private, because “Ubisoft as a public company is under ongoing scrutiny to report better and better quarterly results to please investors which may harm strategy going forward and is harming Ubisoft at this time, when they need to think long-term to get new air into their exceptional franchises”.
To me, all this is sort of Aliens vs Predator, except that the Alien and the Predator are cool movie monsters, rather than angry suits fighting for the biggest chunk of a billion dollar company. Best of luck to any Ubisoft developers worrying about the potential fallout.
