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The Fine Art of Raiding

With his easy manners and sleek good looks, Vincent Bollor? seems the epitome of Gallic gentility. But in clubby French business circles, the 49-year-old industrialist and investor is considered a killer. Bollor? has a habit of shaking up undervalued icons of French business--often family-run companies--then wresting cash and choice industrial morsels from them. Film group Path?, construction and telecom giant Bouygues, and even venerable merchant bank Lazard Fr?res Co. all got a taste of his medicine. For Lazard, it was especially bitter. Bollor? made $260 million from his stake in Rue Imp?riale de Lyon, the linchpin holding company of Lazard's empire, after Chairman Michel David-Weill enlisted Cr?dit Agricole, France's largest bank, to buy him out. Many figure Cr?dit Agricole is positioned to buy Lazard itself. "Let's say that no one had ever dared to behave so rudely to David-Weill until I came along," says Bollor? unabashedly.

Now the predatory Frenchman has another European icon in his sights--secretive Milan investment bank Mediobanca. This finance house also has a rich portfolio of industrial stakes and crossed shareholdings with Lazard. Only this time, Bollor?'s a guest at the table, alongside such traditional Mediobanca shareholders as Banca di Roma and UniCr?dito Italiano. Bollor? will pay $150 million for 18% in a consortium that will own just over 14% of Mediobanca after a capital increase. The Italian bank will use the money to buy out the Lazard group from their shared investments, notably in giant Italian insurer Assicurazioni Generali.

The Mediobanca deal, unveiled Mar. 28, could be very lucrative--possibly as much so as his Lazard adventure. Mediobanca shares, Bollor? says, sell for less than half their net asset value. It's not only Mediobanca that interests Bollor?, though. The real game is a looming battle for Generali, one of Europe's richest corporate prizes. Buying out Lazard will raise Mediobanca's stake in Generali to 14% from 10%, helping it tighten control over the insurer.

Bollor? is one of several European raiders positioning themselves for the consolidation of Europe's financial services. German investment group Cobra has taken 17% of Commerzbank, while Swiss investor Martin Ebner's BZ Group has stakes in the Cr?dit Suisse Group and Mediobanca. "With the whole financial scene moving in Europe, we will see a lot of change," says a close Bollor? associate. "Mediobanca and Generali are rich and have a lot of potential."

Bollor? is an industrialist as much as a raider. His conglomerate, publicly traded Bollor?, is a French blue chip with $5 billion in annual sales. In his corporate role, he's an old client at Lazard, a nexus of influence in France. Bollor? has also cultivated some important friends along the road, notably Antoine Bernheim, a Lazard partner and ally of Mediobanca's late chairman, Enrico Cuccia. Bernheim, who was ousted as chairman of Generali in 1999, wants allies to nominate him for the post again at the Generali shareholders' meeting on Apr. 28 in Trieste. "Bernheim has made a lot of money for me, and now his only goal in life is to go back to Generali as chairman," says Bollor?. "And if he comes back, he will increase the value of the company."

Bollor?'s own conglomerate is a hodgepodge of businesses: palm oil plantations in Indonesia and Malaysia, cargo shipping, and heating-oil distribution in northern Europe. "It's not a very classical model, I know," admits Bollor?. "But I wanted to be diversified in various niches I could be No. 1 in." Ironically, when it comes to his own company, Bollor? lives in a glass house. The group threw off only $130 million in net profits last year, a 2.6% margin. And like many family-owned French firms, the Bollor?s jealously hold 54% of the capital, with allies including Germany's Allianz and Italy's Agnelli family holding 35%--one reason the share price is only about half its net asset value.

CONNECTIONS. Friends say a close brush with business failure taught Bollor? to hedge his bets. The scion of a paper-manufacturing family from Brittany, Bollor? went to work as a 17-year-old bank trainee in 1970 as the family business faltered, instead of attending the elite schools that mold most French business leaders. He did find an important mentor, though--Edmond de Rothschild of the Anglo-French banking dynasty, for whom he began working a few years after Rothschild's Compagnie Financi?re acquired the Bollor? paperworks.

In 1981, Bollor? bought back the indebted family concern from Rothschild for a symbolic one franc and nursed it back to health. By 1983, Bollor? was breaking even and working on his first acquisition, French cigarette-paper company Job. The deal brought Bollor? into contact with Bernheim. Almost 30 years Bollor?'s senior and one of Europe's top investment bankers, Bernheim became Bollor?'s best ally and vice-chairman of his group, guiding him through acquisitions that vastly increased its size.

Bernheim proved particularly helpful after Bollor? bought the old Delmas-Vieljeux shipping company in 1991. Just two months later, the European Commission canceled Delmas' longstanding monopoly on routes between Europe and Africa and the group faced fierce competition. Bernheim, says Bollor?, helped restructure the group and got it back on a firm footing.

Although Bollor? says his raids are a sideshow to his main business, they've made him notorious. In late 1997, Bollor? built up 12.5% in Bouygues, the French construction giant. He and CEO Martin Bouygues soon had a falling-out when Bollor? pressed him to drop his foray into telecoms, which Bouygues later started to do. At the end of 1998, Bollor? sold at a $210 million profit. Days later, Bollor? took 20% of film group Path?--selling a month later to Vivendi for a $220 million profit. Bernheim would again prove his worth after Bollor? picked up his stake in Rue Imp?riale de Lyon. Though Bernheim claims he didn't know what Bollor? was up to, he took his side in pressing David-Weill to restructure the group.

Bollor? now says his group has a war chest of around $1 billion. "Cash is king, and there are a lot of undervalued companies out there in which you can make a lot of money," Bollor? asserts. Having avoided tech shares during the bubble, he's now eyeing tech companies. His most interesting plays may lie ahead. By John Rossant in Paris

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