(News Bulletin 247) – The group is currently working on finalizing the takeover of Lagardère by selling Editis and will be “an active investor” in Telecom Italia. In addition, the Bolloré group should exceed the threshold of 30% of the group’s capital in the second half, fueling speculation around a possible public offer.

“The Year of the Dangerous Life”. This is how Barclays Bank headlined its latest research note on media group Vivendi, following the release of its annual results.

The British establishment refers to several soap operas which could move strongly in the coming months for the group, and would represent as many double-edged opportunities. Vivendi’s management has also returned to these very important issues, to the point that they eclipse the operational performance of the company. Overview.

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1) The Lagardère takeover file

This subject is closely linked to that of the sale of the publisher Editis. As a reminder, Vivendi launched a takeover bid (OPA) for Lagardère last April. If Vivendi has already obtained more than 57% of the group headed by Arnaud Lagardère, the acquisition project has not come as a surprise in Brussels. The European Commission opened an in-depth investigation in November, because this operation would theoretically lead to the marriage of two major publishers, namely Hachette (Lagardère) and Editis (Vivendi). Brussels fears several competition problems, in terms of copyright purchases, distribution, sales to retailers of books in French, as well as the sale of “people” magazines.

To allay the fears of the European Commission, Vivendi has planned to get rid of Editis via a “listing-distribution”, by listing the publisher on Euronext Paris via a distribution to its shareholders. In this project, the Bolloré group, which owns a little less than 30% of Vivendi’s capital, would sell its stake in Editis so as to provide the company with a reference shareholder core. On this last point, Arnaud de Puyfontaine, chairman of the board of Vivendi, said Thursday evening that the group was in contact with three “solid” buyers.

However, Brussels does not seem very fond of this “listing-distribution” scheme. According to Letter A, the European Commission would have, in a confidential document, challenged this arrangement.

Without referring to this information – which Vivendi does not comment on – Arnaud de Puyfontaine explained that his group had received a statement of grievances from Brussels. The manager explained that the “ultimate” objective of the group was to finalize the takeover of Lagardère and that the company was therefore working on “different possible alternatives”.

The sale of Editis could therefore take place in another form to convince the Commission, such as, for example, a 100% sale. Vivendi will submit new proposals for “remedies” (the concessions) to Brussels in mid-March and Arnaud de Puyfontaine has indicated that the Commission should give its verdict by the end of May.

Deutsche Bank considered “reassuring” the statements of the management of Vivendi on this file. Barclays believes for its part that it is “clear” that Vivendi is ready to make more concessions and considers that the supposed refusal of Brussels of the “distribution-listing” scheme constitutes a positive point for the group’s shareholders. This is because this arrangement is “far from being optimal” for Vivendi holders, with taxes to be paid on the distribution of Editis shares, as well as a liquidity discount which would penalize the publisher on the stock market, due to limited float.

2) What intentions for the Bolloré group?

The Bolloré group, owned by billionaire Vincent Bolloré, currently owns around 29.6% of Vivendi. But this participation will automatically increase with the cancellations of shares that the company intends to carry out. Vivendi currently owns around 7% of its own shares, or 78.19 million shares, and must cancel a total of 42 million in the second half of 2023, including 37 million in September, said Chief Financial Officer François Laroze.

The consequence is that in September, the participation of the Bolloré group should exceed 30%, the threshold from which a shareholder has the obligation to file a takeover bid (OPA). “They are perfectly aware of this figure and know the impact of these cancellations”, explained François Laroze.

The whole question is therefore to know what the Bolloré group intends to do. Contacted, a company spokesperson did not respond to a request for comment. Vivendi’s management has logically not expressed itself on the intentions of its first shareholder.

Several analysts, such as Deutsche Bank and UBS, consider that a takeover bid by Bolloré would constitute an important catalyst for the action. A financial intermediary based in Paris recalls that the Bolloré group had in the past undertaken not to request an exemption from the Financial Markets Authority from the obligation to launch a takeover bid. This intermediary also points out that the Bolloré group has significant financial means, the company having finalized in December the sale of Bolloré Africa Logistics for an enterprise value of 5.7 billion euros to the Italian MSC.

Still, the Bolloré group can also, as Barclays points out, very well decide to simply sell shares to stay below the 30% mark.

3) The Telecom Italia story

Vivendi is the largest shareholder in the transalpine telecom operator, with a 23.75% stake. However, for more than a year, the Italian State has planned to create a single fixed telephony network. The overall idea is to bring that of Telecom Italia (TIM) closer to the network of the parastatal company Open Fiber, 60% owned by the Italian Caisse des dépôts (CDP) and 40% by the Australian investment company Macquarie. All this while associating the KKR fund, which had in the past wanted to buy out all of TIM and has a 37.5% stake in FiberCop, the manager of the TIM network. But as pointed out The echoes this project divides the government of the President of the Italian Council, Giorgia Meloni, and a first project was blocked in November.

Vivendi has shown its willingness to dialogue with the government and has conducted discussions to this end, which is again described as “constructive” with Rome.

In January, Arnaud de Puyfontaine, a member of the board of directors of TIM as a representative of Vivendi, left his seat. The leader explained Thursday evening that this decision should allow him to have “total freedom of action” to defend the interests of the French group in this long and complex file. By leaving the company, the leader has in fact authorized himself to speak freely about the situation at TIM without being bound by the confidentiality of the discussions of the board of directors.

Shortly after leaving the board, KKR submitted an offer in early February to buy Netco, the company that combines TIM’s fixed network and its stake in submarine cable company Sparkle. At the beginning of March, it was Macquarie and CDP who drew their hands, in turn submitting a proposal to buy NetCo.

No amount on these offers has circulated, but figures of 18 billion euros to more than 20 billion euros are quoted by Reuters and AFP. Arnaud de Puyfontaine explained Thursday evening to analysts that these sums which circulated in the press did not satisfy Vivendi and did not recognize “the real intrinsic value” of Tim’s assets. He assured that Vivendi would remain “a very active shareholder” of TIM.

The group therefore intends to make its voice heard to maximize the value of TIM in this file. According to several media, Vivendi values ​​NetCo’s assets at 31 billion euros, debt included.

Even if this is not the scenario towards which the group seems to be moving, Barclays believes that selling its stake in TIM would allow Vivendi to greatly reduce its holding discount (the difference between the market value of a company and that of the sum of its holdings) which it estimates at 40%…