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Gameloft board advises against selling stock to Vivendi

Aggressive take-over resisted by publisher

Gameloft's board of directors has advised its shareholders against accepting Vivendi's offer to buy stock and gain a controlling interest in the company, with the French mobile publisher saying that the media conglomerate has "deceived and adversely affected minority shareholders who sold their shares."

The offer was tabled earlier in February, after Vivendi's ownership of Gameloft shares crossed the 30 per cent barrier, triggering a compulsory takeover attempt under French trading laws. As part of the deal, Vivendi offered $6 a share, "a premium of 50.4 per cent over the share price on October 14, 2015, prior to Vivendi's announcement that it became shareholder of Gameloft, and a premium of 22.9 cent over the weighted average share price over the past 6 months."

"the Board estimates they have deceived and adversely affected minority shareholders who sold their shares to Vivendi."

Today, Gameloft has issued a declaration which encourages shareholders to refuse the offer, insisting that the wellbeing of the company is under better consideration without Vivendi's involvement. The board gave four reasons for the decision:

1) "The lack of industrial rationale of this proposed combination. Since the sale of its gaming business over a year ago, Vivendi's revenues are mainly generated by its pay TV business through Canal+ and by its music division through Universal Music. Today, none of Vivendi's businesses can bring attractive synergies to Gameloft.

As an independent company, Gameloft has all the necessary assets developed since its inception to deliver its industrial plan, which aims at taking advantage of the growth of the mobile video games industry and in particular the substantial growth of the programmatic mobile advertising market.

2) "The financial terms of the offer which do not reflect Gameloft's intrinsic valuation and future prospects, which is partly reflected in Gameloft's stock price.

3) "The adverse impact on Gameloft's staff due to the hostile nature of Vivendi's offer and in particular on its creative teams and their management, who strongly value the independence of the company.

4) "The conditions by which Vivendi increased its stake in Gameloft since September 22, 2015, which the Board estimates they have deceived and adversely affected minority shareholders who sold their shares to Vivendi."

Vivendi has expressed its interest in obtaining a controlling stake in both Gameloft and Ubisoft in an attempt to create a Frano-centric transmedia operation.

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