(Reuters) – After jumping in the first part of the session, the Ubisoft action turned down on Friday after announcing the creation of a subsidiary the day before in which the Chinese giant tencent will invest 1.16 billion euros for a minority participation.

On the Paris Stock Exchange, the title of the video game publisher finished with a decline of 1.81% to 12.68 euros, after having increased in a few hours of an increase of almost 12% at a decline of more than 6%.

According to a source cited by an analyst, some hedge funds have adopted a “short” position (saleswoman, editor’s note) on the title.

Ubisoft said Thursday that its new subsidiary, which will bring together the Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six brands, will be valued at a “Pre-Money” business value of 4 billion euros.

“This operation highlights the high claim of the group which could start a weight loss cure on the rest of its activity,” write Midcap analysts in a note.

“This cash injection significantly relieves the group’s bilancian photography with a clear debt almost divided by two,” also notes the broker.

According to estimates by Barclays analysts, on the investment of 1.16 billion euros in Tencent, “520 million euros are available to Ubisoft to repay its debts.”

At the end of September, Ubisoft’s net debt amounted to around 1.1 billion euros.

Morningstar analysts stress that “Ubisoft is gaining financial flexibility with the injection of liquidity, which is equivalent to around two thirds of the company’s market capitalization before the announcement.”

In financial difficulties, Ubisoft released the last opus last week in his successful Success series Assassin’s Creed, whose good performance made it possible to go back on the stock market after losing more than 40% of its value last year.

(Written by Etienne Breban and Pauline Foret, with the contribution of Johan Bodinier and Alessandro Parodi; edited by Blandine Hénault)

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