Ubisoft Silently Negotiating Acquisition Bids From Microsoft, Tencent and EA

Ubisoft is facing financial difficulties, game performance issues, and large-scale layoffs. Titles like Avatar: Frontiers of Pandora, Skull and Bones, and XDefiant failed to meet expectations, leading to stock losses and studio closures. Assassin's Creed Shadows (delayed to 2025) is Ubisoft's hope to turn its fortunes around. Ubisoft is also considering strategic alternatives, including mergers or acquisitions, to stabilize its future.

Ubisoft is "horribly mismanaged" and has not disclosed supposed negotiations with Microsoft and EA regarding possible acquisition bids. That's what the Ubisoft minority shareholder AJ Investments stated, suggesting in a memo that it will organize a protest outside Ubisoft's Paris headquarters to help raise its concerns and be heard.

AJ Investments CEO Juraj Krupa said in a statement read by IGN that Ubisoft is "horribly mismanaged by current management." The investment group, which previously had demanded radical restructuring of Ubisoft management, said Ubisoft needs to share a "clear roadmap for recovery" amid "declining shareholder value, lackluster operational execution, and failure to adapt effectively to market trends."

Krupa went on to say that private financial market site MergerMarket reported that Ubisoft was negotiating with Microsoft, EA, and other companies about potentially purchasing unspecified Ubisoft franchises. According to Krupa, Ubisoft management did not make these negotiations public.

 A Ubisoft spokesperson reiterated what the company announced a few months ago: that Ubisoft is actually conducting a strategic review of "transformation strategic and capitalistic options " but will not issue public disclosures until a possible deal is struck. Aside from Microsoft and EA, Ubisoft is reportedly possibly in talks with Tencent over some kind of financing deal. It remains to be seen how this might possibly occur, but one rumor is that Ubisoft is selling off its individual franchises.

Krupa added that the later postponement of Assassin's Creed Shadows to March 20 devalued Ubisoft's stock but hurt retail investors primarily—not institutional investors like Goldman Sachs and Morgan Stanley. Because Ubisoft didn't act "appropriately," in the view of AJ Investments, the company is inviting angry investors to a May protest. Krupa stated that AJ Investments will call off its protest if Ubisoft's strategic review results in a positive outcome that drives shareholder value up. It has also not discarded the idea of suing Ubisoft.

"Ubisoft has continued to underperform its industry peers, and the company must listen to its shareholders. This demonstration will be a loud message from investors who believe in the company's future but demand change today," Krupa said. As mentioned, Ubisoft's other big release this year is Assassin's Creed Shadows on March 20. It's been a tough year for Ubisoft, with the publisher's cost-cutting measures including large-scale layoffs, studio closures, and the shutdown of XDefiant.