Ubisoft Shares Tumble After Bond Placement -- Update

   By Helena Smolak and Mauro Orru 
 

Shares of Ubisoft Entertainment slumped after the maker of the Assassin's Creed videogame franchise placed bonds convertible or exchangeable into shares to bolster its financial flexibility, refinance existing debt, and to fund repurchase of shares.

At 1025GMT, Ubisoft shares traded 9% lower at EUR26.75. Shares opened at EUR27.35.

Ubisoft said Tuesday that it had raised 494.5 million euros ($541.7 million) from the placement. The bonds have a Dec. 5, 2031 maturity date, a 2.875% coupon and a 47.5% conversion premium.

"While the new bond comes with a higher coupon and entails up to 9.6% dilution assuming full conversion, it extends the weighted average maturity of Ubisoft's balance sheet at a reasonable cost," Citi analysts wrote in a research note.

Shares were expected to open roughly 7% down at €27.35 after the placement, the analysts said, "but the incremental comfort it gives on the risk profile, over time, we think will be well received."

Ubisoft plans to use about half of the funds it raised to repurchase up to EUR250 million in shares.

Write to Helena Smolak at [e-mail] and Mauro Orru at [e-mail]

(END) Dow Jones Newswires

November 28, 2023 05:55 ET (10:55 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.