[PARIS] Vivendi SA, the media company with a US$10 billion cash pile, said it bought stakes in French video game developers Ubisoft Entertainment SA and Gameloft SE for about 160 million euros (US$183 million).
"With a view to utilizing its available cash," the Paris- based company acquired 7.36 million Ubisoft shares, or a 6.6 per cent stake, for 140 million euros, and 5.24 million Gameloft shares, a 6.2 per cent, stake, for 19.7 million euros, Vivendi said in a release on Wednesday. The investment shows renewed interest from Vivendi in the video-game industry, after it gradually sold shares in Activision Blizzard Inc. over the past two years to retain only a 5.7 per cent stake as of June.
Under Chairman Vincent Bollore, who is also its biggest shareholder, Vivendi has accumulated 9 billion euros in cash after disposing of telecommunications assets in countries including France and Brazil - only to come back to phone companies a few months later. It now owns 19.88 per cent of Telecom Italia SpA and ultimately wants to influence its strategy and initiate changes, people familiar with Mr Bollore's plans have said.
With blockbuster titles like Assassin's Creed and Rainbow Six, video-game creator Ubisoft is fighting to woo consumers from market giants Activision and Electronic Arts Inc, each about ten times its size relative to its 2.4 billion-euro market capitalization. Like rivals, it's been experimenting with alternative revenue sources - from subscriptions to toys and animated television shows in Ubisoft's case - to diversify beyond traditional game console discs. Gameloft, which is smaller, focuses mostly on mobile-phone games.
Vivendi's investments were unsolicited, Ubisoft and Gameloft said in separate statements. "We reiterate our intention to remain independent," both companies said in their two-sentence statements.
Ubisoft shares have jumped 41 per cent this year and gained 0.8 per cent to 21.39 euros on Wednesday, before the Vivendi announcement. Gameloft, with a market capitalization of 339 million euros, has seen its shares rise 19 per cent in 2015. Both companies were created by the Guillemot brothers, who still run them and own minority stakes in each.