CD Projekt May Be Facing Hostile Takeover Fight

CD Projekt Shareholders Meeting Leaves Fans Worried Publisher May Face Hostile Takeover Fight

CD Projekt is a highly respected company within the PC gaming community. Renowned for their work on The Witcher 3 and their operation of GOG.com, CD Projekt has met the feature demands that so many PC players have asked for: non-DRM play, immersive game design and unique worlds that merge gameplay with storytelling. But fans were thrown into a panic earlier today when speculation emerged that CD Projekt is hosting a shareholders meeting to possibly prevent a hostile takeover.

Covered on NeoGAF and Reddit, the news comes after the meeting’s schedule was posted online. As NeoGAF user boskee pointed out, the meeting, which would take place Nov 29th, would vote on whether to allow the company to buy part of its shares for 250 million PLN (which is approximately $64 million USD), vote on whether CD Projekt’s subsidiaries should merge into a holding company and vote on the company’s statute. The change would restrict shareholders’ voting abilities if holders have over 20% of the company’s stock. Unless a shareholder has over 50% total vote, there’s no way a shareholder could gain full voting abilities back

The idea, it seems, is to prevent major publishers from swooping in and buying a significant portion of CD Projekt unsolicited. So with the meeting scheduled, this may mean that CD Projekt is taking steps to prevent a hostile takeover in the future, unforeseeable or otherwise.

It is possible that CD Projekt is facing an outside investor coming in to control the company. According to the official CD Projekt website, the company’s shares are already split up quite strongly among CD Projekt’s owners, with co-founders Michał Kiciński and Marcin Iwiński holding 12.82% and 12.68%, respectively. CFO Piotr Nielubowicz holds 6.4%, Amplico PTE holds 5.22%, AVIVA OFE holds 5.16% and Adam Kiciński owns 3.47%. This means 59.47% of the company’s stock is in free float, still leaving a sizable amount of stock in the hands of parties associated with CD Projekt one way or another in its current state.

Plus, if CD Projekt’s plan went into effect, then it would be hard for outside investors to gain control of the company’s direction. Some fans speculate that a hostile takeover is extremely unlikely for an obvious reason: CD Projekt’s success with GOG and The Witcher 3 means the company has a lot of money and is simply taking preventative measures now to prepare for the future.

“CDPR is cash rich right now from Witcher 3 and lots of companies buy back shares when they are cash rich and have nothing better to spend the money on,” Reddit user /u/st00pitr0b0t suggested. “This does have the knock on effect of making the company harder to acquire as there are less outstanding shares trading, but the more immediate effect is that the shares not bought back are worth more. This is great for shareholders, many of which are employees.”

Whether CD Projekt is facing a potential hostile takeover has yet to be seen, but at the very least, the company is clearly taking measures to prevent any significant damage from happening. By the end of November, it seems CD Projekt may have the means to protect themselves should a major investor swoop in.