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Ubisoft CEO Speaks out Against EA Move
Gamespot is reporting that Ubisoft CEO Yves Guillemot has spoken out against EA's "hostile action". From the article: "Considering the industry practice of communicating informally about such decisions, we were disappointed, to say the very least, that EA chose not to inform us of their specific plans beforehand." Further, Voodoo Extreme is reporting that a financial report may suggest the French government is going to assist Ubisoft in staying out from under EA's thumb.
Due to very irritating interstitial advertisements, here is the text of the second article:
French Government To Protect Ubisoft From EA?
December 30, 2004 - An AFX Financial report suggests that the French government may take steps to protect Ubisoft from acquisition by EA, should they decide to expand their 19.9% ownership:
The heads of the studios fear that a purchase of Ubisoft by EA would lead to the disappearance of the last decision making centre in France for the video games industry, La Tribune added.
Ubisoft said last night it is not in talks 'at present' with EA about the US company's recent purchase of a stake. 'In light of recent news spread by the press, Ubisofts board of directors reiterates that, in the absence of information from Electronic Arts regarding its intentions, the latter's acquisition of 19.9 pct of the groups capital is unsolicited and currently considered as hostile,' the company said.
Les Echos newspaper reported yesterday that Ubisoft will gather together some of its largest shareholders next week in a bid to convince them not to throw their weight behind EA.
-- Andrew Burnes
- Leon Mergen
http://www.solatis.com
Isn't government interference a violation of France's WTO agreement?
The CEO's should decide it the old fashioned way-- controllers at dawn! UBI Soft, as the target, gets to pick the game...
If brevity is the soul of wit, then how does one explain Twitter?
Maybe EA and Oracle should get together and swap takeover recipes.
Some call me Howie Feltersnatch
... assist the reader by saying what this hostile action is, why it's occurring, where (France?) and so forth. The summary, as it stands, seems written for people who are already in-the-know, which is a foolish assumption in the face a global internet.
... it's not just for journalists any more!
Who, what, where, when, why, and how
France (and the rest of the EU) are already in violating of the WTO over the massive grants they've given, and are planning to give, Airbus. The US government says it's unfair, but they too have given (and will continue to give) massive grants to Boeing. I guess that complaint has got more to do with the fact that Airbus recently moved ahead of Boeing in number of aircraft being ordered, and the US is no longer the dominant player (IMO). Oddly enough, didn't the French also give a hand out to a server manufacturer a few weeks ago to keep them in business?
Eh.. you don't get what a hostile acquisition is? It's not terribly complex, basically EA went under the table and acquired 20% of a competing shop's stock. Generally they will let them know what's going on before hand. The fact that they were hush about it is an indicication that they are attempting to acquire a 50.1% or greater stake in the company, thus gaining a controlling majority and initiating a "hostile takeover".
There's a bunch of nuances involved with the whole thing, but thats the "for dummies" version.
Naturally this is concerning to the precarious French government as they would lose their primary stake in the game industry to a US company.
I agree, and I didn't have any problem understanding the submission, but the original poster is right, it is uunnecessarily confusing.
It wouldn't have taken much to clarify that the "hostile action" was the sudden purchase of 20% of Ubisoft's shares by EA.
I've often been frustrated by similar submission, so I sympathize.
iana EA Employee, but it seems to me that EA Stopped being about games a long time ago... it's your typical board of directors type shop it seems to me now, who so happen to see videogames as a method of getting rich. I'm sure the people working on "the floor" care very much about their products, but I get the impression that at the top they will dop whatever they can to get the highest Return on Investment, not "make the best game possible"... I don't get the impression that they have any idea how to make the best use of the franchises they have other then sports and Sims, and even that is questionable. K done ranting, back to work for me
Ubisoft CEO Yves Guillemot speaks his mind on the EA deal
With Electronic Arts the new owner of almost 20 percent of Ubisoft, you might expect that company's leader to wobble a bit in the unexpected limelight. Yves Guillemot does anything but.
Just five days before Christmas, with many game industry staffers already on vacation, Electronic Arts dropped an explosive bit of news on the wires. In a short press release, it acknowledged having purchased an estimated $85-$100 million worth of Ubisoft shares.
The move--a surprise to the vast majority of industry observers--gave it a 19.9 percent ownership position in one of its most daunting competitors. Wedbush Morgan senior analyst Michael Pachter told GameSpot, "I think EA is interested in Ubisoft's development talent and in its Gameloft investment [in wireless games]."
But is that all? "I don't know if EA wants to take them out," Pachter said, "but given that Ubi has a pretty strong set of licenses and great development--with a more Euro-centric sales profile--it's a combination that makes sense from EA's perspective."
Pachter clearly assesed the stock acquisition as something less benign than how EA had earlier portrayed it. "EA is not in the business of making passive investments in public companies," Pachter concluded.
Regardless of its motives, the builders of famous franchises that include Madden and Medal of Honor now own a block of Ubisoft shares second in size only to the chunk owned by the company's founders, one of whom is its CEO and president, Yves Guillemot.
We spoke to Guillemot shortly after the transaction was announced.
GameSpot: Yves, to most observers, EA and Ubisoft are arch rivals who compete for market share, mind share, shelf space, and talent. It's hard to believe the two parties can work toward common goals. Assuming all regulatory issues are cleared, your board of directors will have to acknowledge EA's wishes as they might other shareholder's. How do you expect this marriage to get on?
Yves Guillemot: Although EA and Ubisoft are both leading game publishers, I wouldn't say we are arch rivals. All players in the industry compete for market share, shelf space, and talent, but as the past few months have shown, the market is growing, and the more outstanding titles that hit the shelves, the more the market grows. So getting great games out there is a common goal that all publishers share.
GS: So how do you read the move by Electronic Arts?
YG: I have stated on the record that I view this action on the part of EA as hostile.
GS: Do you see malevolence at its core?
YG: Until we have further information we cannot say what EA's goals might be.
GS: How does having EA as a shareholder affect the issue of disclosure, specifically company strategy?
YG: In terms of the company's confidential strategy, that information is not provided to any of our shareholders. This has always been our policy, and we have consistently shown ourselves worthy of the confidence of our shareholders.
GS: Are there remaining shares of the company that are vulnerable to acquisition by Electronic Arts, and if so, is Ubisoft management considering options if EA were to become a majority shareholder?
YG: Ubisoft is a publicly traded company, with 22.8 percent of its voting rights held by the company's founders. Of the remaining capital publicly held, 13 percent of voting rights are in the hands of financial institutions and 44.5 percent are in the hands of small shareholders. The management is studying all its options under several different scenarios.
GS: Given this twist in the company's timeline, what does the future hold for Ubisoft?
YG: For the immediate future, we are still looking forward to a record-breaking fourth quarter, with the release of several titles which you [in the press] also seem to be eagerly anticipating.
GS: What about the long-term outlook?
YG: When looking at the longer-term, our only concern is the
Tsk, tsk. America wouldn't even be here without France. They financed America's Revolutionary War for independence and saved us at the last hour in the War of 1812.
Josh
Or in the words of Eddie Izzard:
Here's what I hear has been happening in France... Every now and then some non-French company wants to buy a French company. The French government immediately steps in and makes a second French company buy the first French company the foreign company was interested in thereby creating a much larger French company which is no longer small enough for the foreign company to buy. When a German pharmaceutical company (Germany has some of the largest in the world) wanted to buy a French one the French government got a separate French pharmaceutical company to buy it instead. The intended effect of all these forced mergers seems to be to get France back into competition with other countries.
If you don't believe me look into the history of France Telecom which purchased Wanadoo, Orange, and Equant (the last two were previously foreign owned but operated in France). The thing about the purchases of these is that France Telecom now owes a billion euros back to the government for illegal subsidies.
Another classic example of Little Man's Syndrome is Vivendi Universal.
Direct away from face when opening.
As opposed to USA's Microsoft Windows and extremely obese women? ;-)
Sam Fisher vs. Football players? My money is on Sam Fisher.
In France, however, management has priority in the law. You might think that the shareholders control the company through a board of directors appointing the CEO and others in management, but the truth is under law the equity owners are extremely limited in making the kind of company-saving decisions that they can in the US. The result is an anemic economy.
This is a seperate issue from the French government offering to become specially involved, but is relevant to EA's ability to affect Ubisoft in the same way they would any other company in the US inwhich they owned 20% of the shares.