Gameloft SE (GFT) Shares Soar on Vivendi SA (VIV) Hostile Takeover Offer


The shares of Gameloft SE (EPA:GFT) surged more than 16% to $6.36 per share on Friday around 10:11 AM in Paris after Vivendi SA (EPA:VIV) disclosed its proposed hostile takeover of the French video games developer for mobile devices.

Vivendi is the largest shareholder of Gameloft and plans to acquire all of the shares of the video games developer that it does not yet own for €6.00 each. The French media conglomerate owns more than 30% of Gameloft.

The proposed acquisition price represents a 50.4% premium to the closing price of Gameloft’s shares on October 14, 2015 before Vivendi became a shareholder of the video games developer. Based on the current trading price of the stock, investors are expecting Vivendi to raise its offer for the video games developer. It is expected to submit its  public tender offer  with the Autorité des Marchés Financiers (AMF), the securities regulator in France.

Acquisition will create value for both companies

Vivendi believes that acquiring Gameloft will create value for both companies. The media conglomerate said the video games developer fits perfectly with its strategy to become a global leader in content and media.

According to Vivendi, video games represent a significant part of the entertainment and media market. The company believes that mobile gaming will achieve the fastest growth.

The media conglomerate also noted that Gameloft is one of the few in the mobile gaming industry that succeeded in positioning itself globally.

A creeping takeover

Aside from Gameloft, Vivendi also owns a 15% stake in Ubisoft Entertainment (EPA: UBI), the larger video games developer in France.

Gameloft and Ubisoft are headed by the brothers, Michel Guillemot and Yves Guillemot, respectively. Both executives called Vivendi’s move as a “creeping takeover.”

The Guillemot brothers own minority stakes in Gameloft and Ubisoft. They increased their voting position in Gameloft to 25% last year, and indicated their intention to take the necessary steps to block a creeping takeover.

During an interview with Bloomberg News last year, Yves Guillemot said Vivendi’s action “shows a lack of respect for what Ubisoft is today and for all our shareholders.”

Yesterday, Gameloft issued a statement indicating that its Board will meet next week to discuss the matter. The company will release a statement after the Board meeting.