UbiSoft Deal Update

Some new and interesting developments have come up with the Electronic Arts and UbiSoft wrestling match. Until now UbiSoft has been cast as the unlucky underdog that Electronic Arts is harassing.

Martin Arnold wrote an article for Financial Times, which sheds new light to the situation. He suggests that Ubisoft, like so many French companies that are still controlled by their founders, suffers from poor corporate governance. This manifests itself so that after the company has beeb taken public, owners can cash in by slowly selling their stocks but retaining controlling stake at company. Selling shares compensates the lack of dividends and as a result, founders have no incentive to run the company in efficient manner.

UbiSoft seems to be a good example of this, although the Guillemot brothers own 22% of voting rights and 15% of company stocks they still rule the company board, since all the brothers sit in it. Not exactly a successful balancing act, is it?

David Radd in Game Daily wrote that Guillemot brothers own 17,5% of stock and 26,6% of voting rights, Radd’s original source was French La Tribune. The most striking new development according to this source would be that French government might intervene and stop Electronic Arts from buying UbiSoft.

I am ready to believe that French government would do something like this. Heck, I believe they could do just about anything (just my image of French politics). So, I thought that maybe somebody is counting on the possibility that just the threat would be big enough deterrent for Electronic Arts. Ah, the world of politics…