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Vivendi/Lagardère: Bolloré sets sights on French media assets

Vivendi SA updates

Like hunters in the deep seas, Vincent Bolloré often rises to his prey before it realises the danger. On Thursday, Bolloré’s media business Vivendi announced it will buy all of the Lagardère shares held by activist investor Amber Capital. Assuming competition authorities approve, a mandatory takeover will follow.

Lagardère scion and chief executive Arnaud Lagardère had allowed the business built by his father to drift into dangerous waters. Its share price has moved sideways for a decade. Amber Capital’s stake originally aimed to loosen Lagardère’s outsized control of the company through a commandite company structure. This enabled its CEO to maintain control despite a tiny 7 per cent stake.

Wily Bolloré bought an initial stake under the guise of backing Lagardère’s efforts to maintain control. Any hint of friendliness evaporated as Bolloré increased his stake, eventually forming an alliance with Amber. Once a white knight, Bolloré became a great white shark instead. 

A deal to dissolve the commandite in April gave Lagardère another five years as chief executive. But it also signalled the opportunity for a takeover. The decision of LVMH founder Bernard Arnault to convert a stake in Lagardère’s holding company into listed shares suggested his support for the status quo has also dissolved. 

Vivendi will pay €24.1 per share for 17.9 per cent of Lagardère’s shares or a 24 per cent premium to the current share price. Upon completion of the regulatory review, expected by December 2022, Vivendi will hold 45 per cent of the shares. A tender to remaining shareholders will then go ahead at the same price. At only €2 per share above Lagardère’s five-year average, it is hardly generous. Kepler Cheuvreux puts the fair value at €27 per share excluding a takeover premium. 

With his large stake, Bolloré can afford to circle his prey slowly. What he seeks is Lagardère’s publishing businesses, which include book publisher Hachette and politically important titles such as Paris Match and the Journal du Dimanche. Weaker swimmers within France’s media waters beware. Bolloré is on the hunt.

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