Vivendi has taken equity stakes of 6.6% in Ubisoft and 6.2% in Gameloft, with an official view to “utilising its available cash”. Vivendi’s entry is unsolicited and we believe it non-avowedly wants to force a merger between both groups (activist investor role). Vivendi’s move will now encourage investors to look beyond the current fiscal year (i.e. to play the entire 2013/19e console cycle and the themes of dematerialisation and convergence between platforms). We maintain our Buy rating and FV of EUR5.4 on Gameloft (investors will now finally look at next year’s multiples to play the margin recovery story) and we upgrade Ubisoft from Neutral to Buy with a FV raised from EUR15.5 to EUR25 (we revisited the equity momentum on this stock).
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