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Ubisoft CEO Speaks out Against EA Move 365

Posted by Zonk
from the ubisoft-and-the-beanstock dept.
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.
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Ubisoft CEO Speaks out Against EA Move

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  • by leonmergen (807379) * <lmergen AT gmail DOT com> on Thursday December 30, 2004 @01:27PM (#11220000) Homepage

    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

    • by Anonymous Coward
      France does not want to lose France based companies.

      It is good that EU countries are now subject to the same buyout and then layoff trend that the USA went through in the 1980s.

      The loss of companies that move out of France + the loss of jobs from buyout/layoffs will force France to actually support a pro-business environment instead of a entitlement burdened nanny state.

      The euro has greatly facilitated free trade, free capital, and personal freedom.
  • Just Talk (Score:2, Insightful)

    by Aleman (825040)
    UBI can speak out against it all they want, but what they really need to do is give their current shareholders more reasons to hold onto the stock. Maybe they should have spent more time polishing Ghost Recon 2...
  • WTO? (Score:5, Insightful)

    by exhilaration (587191) on Thursday December 30, 2004 @01:28PM (#11220014)
    Isn't government interference a violation of France's WTO agreement?
    • by lxt (724570) on Thursday December 30, 2004 @01:38PM (#11220132) Journal
      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?
      • That's not... entirely... accurate. Specifically, the US government has placed purchase orders for airplanes from Boeing. This is somewhat different from the welfare that Airbus has received in the form of 'no pay back' grants with no expectation that they provide anything in return except 'jobs'.
        • by Richard_at_work (517087) <richardprice&gmail,com> on Thursday December 30, 2004 @03:32PM (#11221213)
          Boeing received $3.2billion USD in tax benefits and cuts to place the 7E7 factories in Washington State. Boeing outsourced the wing and center fuselage construction to Japan, where the three firms making the sections are 75% subsidised by the Japanese government, allowing these sections to be sold to Boeing much cheaper than they otherwise would be. This has already been judged by analysts to be illegal under the 1992 agreement, and is currently the subject of an EU investigation with an eye on ammunition if the current WTO stuff goes ahead.

          Airbus receives Launch Aid in the form of interest based LOANS. These loans must be paid back to the respective government within 17 years of its inception, and must account for no more than 33% of the total development cost of the aircraft. This was agreed in the 1992 trans atlantic agreement, as was the clause that states that Airbus doesnt have to repay these loans if the aircraft fails to ship. So far, every loan lent to Airbus has been paid back within the terms laid down. Airbus does lease factories off of local governments at a favourable rate tho, but this isnt covered under hte 1992 agreement, and so is a gray area. This is not the same as getting tax cuts for relocating production tho.

          Boeing isnt exactly the pure virgin dressed in white you think they are.
          • Airbus receives Launch Aid in the form of interest based LOANS.

            If I remember correctly, these only have to be paid back if the product under development with these loans turns a profit - kind of takes the risk out of business.

            I also think the idea of tax-cuts as aid is a bit gray as well. If the tax rate was simply lower, it wouldn't be called a cut. That then asks what are the comparitive tax rates - something I'm not sure we should be getting into unless we want to form a world government.

            Air

        • That's not... entirely... accurate. Specifically, the US government has placed purchase orders for airplanes from Boeing. This is somewhat different from the welfare that Airbus has received in the form of 'no pay back' grants with no expectation that they provide anything in return except 'jobs'.

          There is more then just plane purchases. There also research projects with super high overhead, far higher then they should be. The missle shield project is one of them. Lots of corprate welfare there. A lot of a
    • Re:WTO? (Score:3, Informative)

      by rtaylor (70602)
      Isn't government interference a violation of France's WTO agreement?

      Not if they play by the same rules as everyone else. They're looking to expand their ownership of the firm -- presumably so they have more control of the board and can reject the offer.

    • I think most reasonable people on either of the atlantic would say 'So what !'.
    • The WTO is put in place to remove sovereign powers for the benefit of the business community (read: multinational conglomerates). Boohoo if it offends the WTO. As others have said. The US violates its WTO obligations whenever it makes financial sense to do so.

      The question is. Why do governments constantly feel the need to help corporations to 'compete'. Isn't the whole point of capitalism to allow firms to compete fairly in a FREE MARKET. If a corporation can not compete it is, according to that theory,
  • Duel (Score:5, Funny)

    by Shadow Wrought (586631) <shadow...wrought@@@gmail...com> on Thursday December 30, 2004 @01:28PM (#11220018) Homepage Journal
    The CEO's should decide it the old fashioned way-- controllers at dawn! UBI Soft, as the target, gets to pick the game...
  • by albn (835144) on Thursday December 30, 2004 @01:32PM (#11220061) Journal
    Maybe EA and Oracle should get together and swap takeover recipes.
  • by Shoten (260439) on Thursday December 30, 2004 @01:34PM (#11220087)
    Why doesn't Ubisoft just send Sam Fisher [splintercell.com] to take care of EA for them? :)
  • by YetAnotherName (168064) on Thursday December 30, 2004 @01:35PM (#11220104) Homepage
    ... 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.

    Who, what, where, when, why, and how ... it's not just for journalists any more!
    • Even if you didn't know what was going on, it doesn't take too much brainpower to infer that EA is trying to take over Ubisoft...
    • by Anonymous Coward
      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 dummi
  • by Vvornth (828734)
    ...the similarities... the Borg and EA!
  • by Reapman (740286) on Thursday December 30, 2004 @01:48PM (#11220244)
    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
    • EA and UbiSoft are both mainly publishers, not developers. They do some in-house development, but their bread and butter is much like any RIAA or MPAA member, they produce and publish other peoples games, and pocket a few bucks.

      Now slashdot is going to try and convince me EA=bad, UbiSoft=good, just like MS=bad, IBM=good.

      It's 100% pure bullshit, and you'd have to be pretty simple-minded to think any corporate entity has your best interest as a gamer/consumer at heart.

      As an aside, EA's employment practice
  • First on the ball!!! (Score:3, Informative)

    by rathehun (818491) on Thursday December 30, 2004 @01:50PM (#11220260) Homepage
    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
  • by Anonymous Coward
    Sam Fisher will infiltrate Electronic Arts headquarters under the cover of darkness. After gathering intelligence related to the hostile takeover, he will go to the roof for extraction. Alarms or civilian deaths will result in mission failure.
  • by St. Arbirix (218306) <matthew,townsend&gmail,com> on Thursday December 30, 2004 @02:01PM (#11220371) Homepage Journal
    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 [wikipedia.org] 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.
    • France telecom is not a typical exemple as it is a monopoly quite similar to microsoft at the french level, but directly owned by the government (51% of the shares and the board of directors is made of state men).
      So their amount of power AND their lack of independance make them quite different from a pharmaceutical company, to take your other exemple.
      Also they never bought wanadoo. They made it. Wanadoo is the name they gave to their internet division. It has never been independant but also it never played
  • I've been a fan of the Madden football games for years.. I played the first one on my AT in CGA. Lately, there hasn't been much change to the games other than frilly add-ons like EA online. With their now exclusive contract with the NFL and this, I can easily say good riddance to a monopolistic company that doesn't seem to care anymore about making great games.

    On the flip side, if Ubisoft is going to leave themselves open to a takeover, who are they to complain when it actually happens? I think this is
      • On the flip side, if Ubisoft is going to leave themselves open to a takeover, who are they to complain when it actually happens? I think this is underhanded by EA, but it's perfectly legal. Ubisoft may whine, but has no leg to stand on with regards to a formal complaint.

      Perhaps I don't fully understand the market, but pretty much every company is potentially open to a hostile takeover. As long as someone can convince 51% of the existing stockholders to sell to them, they can takeover. Granted there a

  • by MBraynard (653724) on Thursday December 30, 2004 @02:15PM (#11220500) Journal
    The French system is different from the US/UK system. In the US/UK systems, the shareholders interest come first before the law. They can lay people off, off-shore jobs, merge, etc. if they think that is what will best enhance shareholder value. This is a good thing because it makes company's more competitive and, because the guarantee of control is there, it is easier to raise funds from investors for new job-creating project/companys/IPOs.

    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.

    • The French system is different from the US/UK system. In the US/UK systems, the shareholders interest come first before the law. They can lay people off, off-shore jobs, merge, etc. if they think that is what will best enhance shareholder value. This is a good thing because it makes company's more competitive and, because the guarantee of control is there, it is easier to raise funds from investors for new job-creating project/companys/IPOs.

      So the whole idea of a corporate charter is just silly?
  • There is a rumor that EA simply wants to get in on a new Ubisoft game. The premise of the game is that the player is the head of a French bank and collects fees from an Iraqi dictator who is supposed to be using the money in his account to pay for food and medical supplies for his people, but is really funneling it to terrorists and arms dealers.

    You get bonus points for lobbying the UN to not sanction a war in Iraq so that you can keep collecting fees from the account.

    http://www.washingtontimes.com/nat [washingtontimes.com]

  • by Groovus (537954) on Thursday December 30, 2004 @02:46PM (#11220790)
    If you don't want to lose control of your company, don't go public - it's really that simple.

    Everyone likes to play by the rules as long as they're in their favor, but as soon as someone else gets the upper hand and threatens your (insert precious item here) the rules suddenly become unfair and need to be circumvented. Human nature I guess. Hooray for "free" markets though - greed really is the best motivation for human endeavors, right?
  • They release pretty bland games anyway, they just push so many out the door they still exist. Their NFL license is wack. Guess I won't be buying a new football game any time soon. And I bought Battle for Middle-earth. I have to register a user account just to play online with a friend. There's no options whatsoever to configure when hosting a game.

    Their attitude seems to be "You'll play what we develop and like it!" They forget to add "No matter how inferior a product it is!"

    I say fsck EA. Unfortunat

It is the quality rather than the quantity that matters. - Lucius Annaeus Seneca (4 B.C. - A.D. 65)

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