Vivendi heritage vows to prove business works as an integrated group

The heir to Vincent Bolloré’s media group has pledged to prove that Vivendi is a coherent company and not a disparate group of holdings, a goal promised many times but not yet achieved by the family business.

“The challenge we have at Vivendi is to prove that we are an integrated industrial group present throughout the value chain of entertainment, media and culture and not a conglomerate of holdings,” said Yannick Bolloré a year later his father to the Financial Times. Corporate raider and industrialist Vincent Bolloré, officially retired from the company.

“This would allow us to reduce the inventory markdown, which would add a lot of value,” Bolloré added.

Vivendi is at a transition point, both in terms of the elder Bolloré’s withdrawal from the limelight and in terms of the composition of the group. Vincent Bolloré first invested in the French group about a decade ago and has held a minority stake of almost 30 percent ever since. But as chairman, he has long since set the course.

He led the company’s downsizing by selling assets and adding advertising agency Havas. The most recent sale came when Vivendi spun off its largest and most valuable business via a Universal Music Group listing two years ago. That left a much smaller pay-TV business with Canal Plus, Havas and some print magazines.

While the UMG, in which the holdings of the family holdings Vivendi and Bolloré are the largest shareholders, is now valued at more than 40 billion euros, a slimmed-down Vivendi is currently valued at 10.8 billion euros.

The younger Bolloré, who became chairman of Vivendi’s board in 2018 and remains chairman of Havas’ board, now faces the challenge of making Vivendi a more cohesive group. He announced last year a plan to combine the group’s holdings – for example, using material developed at their publishers to develop TV series for Canal+ – while expanding its businesses outside France.

The group is currently negotiating with European competition authorities in hopes of winning the proposed takeover of French media and retail group Lagardère, which owns book publisher Hachette, the world’s third largest publisher. However, as it already owns Editis, a French-focused publishing company with a significant market share, regulators have called for the company’s sale.

Vivendi had proposed to the supervisory authorities to spin off Editis in a so-called share distribution and to sell the remaining shares in a two-stage process.

Yannick Bolloré said he expects a final EU response on the Lagardère purchase by early summer, following meetings in Brussels last week.

“Brussels had preferred the simplest solution [of an outright sale] and the share allocation is not common, so [it is] a bit new. Brussels is open to new ideas, but wants to be sure,” he said.

Three parties – an alliance of businessmen Stéphane Courbit, Daniel Kretinsky and Pierre-Edouard Stérin, Canadian group Quebecor and media group Reworld – have submitted bids for Bolloré Holding’s remaining stake in Editis after the spin-off, with the buyer expected to be selected soon becomes .

Vivendi reported an annual net loss of $1 billion on Wednesday.

Sales increased by 10 percent to 9.6 billion euros. Excluding the contribution from Vivendi’s holdings in Lagardère and UMG, earnings before interest, taxes, depreciation and amortization rose 10 percent to 646 million euros.

Vivendi’s shares have fallen about 9 percent over the past year, compared to a 17 percent rise in the Stoxx 600 Europe Media Index.

Canal+ has relied on international expansion to grow and now has around two-thirds of its subscribers outside of France. The broadcaster also recently increased its stake in South African pay-TV operator MultiChoice to over 30 percent, just below the threshold that would trigger a mandatory offer to shareholders.

Both complement each other geographically. Canal+ operates across much of West Africa, while MultiChoice covers the south and center of the continent.

“The idea for Canal+ is to grow its subscriber base to bring its content to a broader base of subscribers, either through acquisitions or partnerships,” said Bolloré. “The idea is to create a group or community of companies that can compete with major television platforms.”