Assassin's Creed maker Ubisoft's shares surge 9% on deal to spin off top game franchises
Ubisoft shares surged on Friday after the French video game publisher announced a deal to spin out some of its best-selling franchises.
On Thursday, Ubisoft revealed plans to form a new gaming subsidiary, with Chinese technology giant Tencent investing 1.16 billion euros ($1.25 billion) into the unit.
The subsidiary will include Ubisoft's best-known games brands, including Assassin's Creed, Far Cry and Tom Clancy's Rainbow Six, according to a press release.
Ubisoft shares jumped 11% Friday morning before paring gains later in the day to trade 9% higher.
The game maker said Thursday that its newly formed unit would "focus on building game ecosystems designed to become truly evergreen and multi-platform."
The investment from Tencent values the new subsidiary at 4 billion euros, Ubisoft said. That's more than double Ubisoft's current market capitalization.
Investors were hoping for a move from Ubisoft to clear up uncertainty surrounding its future after a series of challenges faced by the firm in recent years.
Ubisoft has been plagued by various issues, from financial struggles to delays to some of its key games — including its most recently released Assassin's Creed Shadows title.
In February, the firm reported a 52% drop in fiscal third-quarter net bookings, beset by underperformance of some of its key games.