Vivendi: Bolloré’s Master Plan

There is little doubt that Vivendi needed to do something. The group, which began life under Napoleon III as a water utility, had long suffered a conglomerate discount in its share price. Some investors had begun to ask an uncomfortable question: what was the justification for its existence? Yet Mr Bolloré’s vision of turning Vivendi into a global media force has its detractors. Analysts point to the relatively small size of southern Europe’s audiovisual market compared with that of the US. They also question prospects for growth in a region whose economies, with perhaps the exception of Spain, have been stagnant for years. As chairman and minority shareholder at Vivendi, Mr Bolloré has attracted scrutiny over issues of corporate governance. Activist shareholders have openly questioned his style with one branding the Bolloré group’s purchase of Vivendi shares “opportunistic”. The appointment to the Vivendi board last month of Yannick Bolloré, his son and chairman and chief executive of the Bolloré family’s majority-owned Havas, turned heads. Bolloré senior says he fails to understand why. “It should not be a negative,” he says. “I don’t understand. It’s normal when you invest somewhere to have shareholders around the table. I would love to know why it’s a problem.” With Yannick’s arrival, the Bolloré group now has two seats on Vivendi’s 14-member board. But it is also the seventh board change since Mr Bolloré became chairman. He says that all the other members are fully independent, but one investor last year told the FT: “He is clearly stacking the board.” (FT)