The shares of Ubisoft Entertainment SA (FR:UBI) dropped over 8% today after the company raised €494.5 million in convertible or exchangeable bonds. These bonds, which are set to mature on December 5, 2031, carry a 2.875% coupon and include a 47.5% conversion premium. The purpose behind this move is to enhance financial flexibility, restructure current debts, and facilitate the repurchase of company shares.
Ubisoft intends to allocate roughly 50% of the funds it secured towards the repurchase of shares, with a target amount of up to €250 million.
The company’s CFO, Frédérick Duguet, mentioned the placement as successful and further added that an 8-year maturity “underlines investors’ confidence in Ubisoft’s credit standing as well as its long-term value creation potential.”
Based in France, Ubisoft is a video game publisher known for its popular franchises, such as Assassin’s Creed, Far Cry, and Rainbow Six. The company has development studios in various locations globally, contributing to the creation of its diverse portfolio of video games.
What is the Stock Price Prediction for Ubisoft?
The Ubisoft share price is trading down by 8.12% at the time of writing. The shares are on a recovery road after reaching a seven-year low in January 2023, when the company reduced its revenue guidance and cancelled a few games. Year-to-date, the stock is trading mostly flat at a loss of 0.7%.
Citi analysts expected the shares to fall after the placement news but also believe they will be positively welcomed in the long run.
According to the TipRanks consensus, UBI stock has a Hold consensus rating backed by five Hold, one Buy, and one Sell recommendations. The Ubisoft share price target is €28.69, which represents a change of around 6.3% in the share price from the current level.
