Why will Ubisoft be the perfect acquisition for Microsoft and Xbox?
Rumors circling Xbox and Ubisoft have been in the out since the former announced the potential acquisition of Activision Blizzard. Since then, there hasn't been much movement until yesterday, when some fresh revelations have come out.
According to the latest news, the higher ops at Ubisoft are preparing for a potential sale. Some interested suitors include private equity firms like KKR. However, there's a strong incentive for which Microsoft should look to acquire Ubisoft, purely based on what the former could gain.
The fresh news of the buyout comes over the relatively poor performance of financials, which has seen a consistent decline in share prices. The share price has significantly dropped, which has reduced the company's market capitalization.
Yves Guillemot is currently the largest shareholder, but it's rumored that he is looking for an exit strategy. While there has been confirmation or denial of a potential offer, Xbox could be a major winner if it pulls off the coup.
The valuation of any potential deal is usually judged from two major angles - finance and content. To start with finances, there's no substantial amount that a firm will need to pay to buy out Ubisoft.
However, any value will be at a significant discount purely due to how much the valuation has come down. According to Bloomberg, the per-share price has declined from $110 in mid-2018 to $45.
The deal between Activision Blizzard and Xbox will go at a discounted rate compared to the per-share price of the former at the time of the agreement. With Ubisoft, Microsoft has the chance to get a real bargain deal as things stand.
Guillemot is reportedly looking at an exit strategy that could also make things easier for any potential buyer while negotiating a deal.
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