Bollore’s Company Raises Stake in Vivendi to More Than 20%by
Billionaire cementing control as media company expands
Voting stake to reach 29% by April after several transactions
Vincent Bollore’s investment company is increasing its stake in Vivendi SA to more than 20 percent as the billionaire shows confidence in the French media conglomerate trying to revive its TV business and expand in video games and telecommunications.
Bollore Group is set to hold about 29 percent of voting rights in Vivendi by April 20, 2017, taking into account the double voting rights attached to the shares it is acquiring, according to a statement Monday. Bollore Group, based in Puteaux, France, had a financial stake of about 15 percent in Vivendi and 16 percent of its votes as of June.
The 64-year-old activist investor, who became chairman of Vivendi in 2014, is cementing his control as he seeks to expand the Paris-based company’s business beyond music, film and TV. Under Bollore, Vivendi has accumulated a stake in Telecom Italia SpA and re-entered video gaming by acquiring Gameloft SE and buying a stake in Ubisoft Entertainment SA. The increased holding probably doesn’t represent a bet that Vivendi is on the verge of turning around its Canal Plus pay-TV business, said Conor O’Shea, an analyst at Kepler Cheuvreux.
“We see this more as a move to consolidate the long-term control of the company, perhaps for the benefit of the next generation of Bollores,” O’Shea wrote in a note to clients. Bollore Group’s investment in Vivendi is now close to 5 billion euros ($5.6 billion), more than half the holding company’s market value, signaling its conviction is “firmer than ever,” he said.
Shares of Vivendi, which owns Universal Music Group, rose 1.5 percent to 18.35 euros at 12:55 p.m. in Paris, valuing the company at 23.6 billion euros. The stock had lost 9 percent this year through last week. Bollore added 0.1 percent to 3.04 euros, giving the company a value of 8.9 billion euros.
The billionaire is slashing expenses at Canal Plus, which is losing money in France. The company’s objective is to reach break even in 2018 in France and to achieve a level of profitability similar to that of its best European peers. Costs at Canal Plus, one of Europe’s biggest pay-TV networks and a major producer of films and television shows, contributed to a drop in Vivendi’s second-quarter earnings.
Bollore Group is raising its Vivendi stake through several transactions, including an acquisition of call options and maturing of a share loan agreement, the company said.
“These operations reflect the confidence the Bollore Group has in Vivendi’s potential for development and its willingness to remain as reference shareholder of the company in the long term,” the company said. A spokesman for the holding company didn’t immediately return a call seeking further comment.