Vivendi

""Vincent led this operation with all the cunning of a peasant from the Millevaches plateau, who takes out his beast, shows it at the market, brings it back to the farm, and lets the rumor swell," appreciates this close associate of Bolloré, who knows the region well. Let's judge: in 2007, Vivendi already wanted to sell Universal Music to reduce its debt, and found no one to buy the company, which was nevertheless the world leader, at the proposed price of 7 billion euros; in 2014, with the first encouraging results of streaming, Jean-René Fourtou had received an offer of 13 billion; not expensive enough, Bolloré believes, "Universal can go on its own for 25 billion"; indeed, in 2018, Oddo-BHF bank surprised with an estimate of 20 billion; and, two years later, the sale of the first two 10% tickets of Universal will be based on 30, then 33 billion; before the Amsterdam Stock Exchange, on the day of the listing in September 2021, exploded its valuation to... 45 billion euros. More than the market capitalization of Vivendi, when it still owned this exceptional asset!""

"Here are two entrepreneurs who are also heirs; who have tremendously developed what they inherited, even though Férinel's real estate was in much better condition than Bolloré's papers; who each identified a sleeping beauty (Dior, within the Boussac empire, for Arnault, and Rivaud bank for Bolloré); who followed the advice of the same godfather in the Parisian establishment-Antoine Bernheim-to finance their rise to power; who ensured the construction of their empire through a very unusual blend of entrepreneurial aggression and ability to leverage new financial market instruments; who experienced both failures and windfalls (Gucci for Arnault and Bouygues for Bolloré); who moved into the new century without forgetting how to wield hostility (Hermès and Havas learned this to their detriment); who practiced financial engineering with incredible dexterity-Arnault increased his share of LVMH's capital from 38% to 46% in one day, crushing the Christian Dior holding, while Bolloré reached 27% in Vivendi, thanks in large part to the billions inherited from the opportune merger of the communication group with Havas; and who, finally, share the same dynastic ambition, a fierce determination to firmly establish this resolutely familial choice over time. In fact, it is the defense of family capitalism that is the cause of their joint presence in Lagardère's capital, and the potential source of a collision..."

"This operation, incredible for Vivendi shareholders and especially for the first among them, also suits Bolloré for two reasons: "Vincent doesn't like doing business in the United States," notes his friend Henri Lachmann, who closely accompanied his first steps on Vivendi's supervisory board."

"Today, Vivendi rather talks about the ambition to build a "European Netflix," an alternative to the Californian network that is colonizing the world. "But always focusing our investments towards the south and east, never towards the west," explains a member of the executive board, thus justifying the other masterstroke of 2021 after the takeover of Lagardère: the extraction of Universal Music under fantastic financial conditions."

"With Challenges, around the same time (2016), the tycoon is a little less diplomatic: "I torpedo structures. Here, everyone was working in their own stronghold, whereas Vivendi means 'let's live together'.""

"Jean-Marie Messier, who would have every reason to be bitter, has blessed the whip given by his distant successor: "There was a gap between 2002 and 2014 in terms of digital strategy," reported the former CEO of Vivendi to Challenges magazine."

"long-term investment," says Vivendi, which is cheap (220 million euros), for a waiting position in a 7 billion euros revenue group, present in publishing (Hachette), airport retail (Relay), and still possessing a few powerful media tools (Europe 1, Paris Match, and Le Journal du Dimanche)."

"Lagardère, the heir, has been in trouble for two years with Amber Fund, which has been causing him trouble from London, fearing losing the majority of votes at its general assembly in the following May. Nothing fatal, as Lagardère is protected by a rare limited partnership status. But he may have to give up positions as directors that were previously de facto reserved for friends. Bolloré senses the "circumstance" and therefore takes "action": he acquires a 10% stake in Lagardère through Vivendi, which he controls."

"So let's summarize: since entering Vivendi in 2012, the Bolloré group has received 660 million euros in Vivendi shares for its TNT channels, 1.34 billion euros in dividends, the equivalent of 1.4 billion euros saved through capital reductions, 2.4 billion euros through the acquisition of 60% of Havas, and a final asset of 8 billion euros in UMG shares. In total: nearly 14 billion euros that have benefited Bolloré during this prodigious decade. Of course, to enable this succession of operations, it was necessary to take risks and invest: tens of millions of euros to initially finance the annual losses of the TNT channels, hundreds of millions of euros to establish an impregnable position in Havas, and billions to strengthen their position in Vivendi. The true cost of Bolloré's takeover of Vivendi, Vincent Bolloré keeps to himself, likely between 3 and 4 billion euros. On the other hand, he has already earned three or four times more... and he still holds his 27% stake in Vivendi, even if it has become smaller. Hats off to the artist!"

"money is considered a raw material that needs to be identified, exploited, developed, and valued. Here are some figures to testify to that. This first participation in Vivendi represents the equivalent of 360 million euros, much higher than the sums invested by Bolloré in his two TNT channels. To increase its power and reach the 5% stake that will open the doors to the supervisory board, this time more than 700 million euros from Bolloré's treasury must be withdrawn. And around 3 billion euros in the following years to reach the threshold of 15%, which will change everything, with the allocation of double voting rights and the promise of comfortable future dividends-600 million euros of exceptional distribution from 2015, at the time of the sale of SFR, and then between 100 and 200 million euros that will come in every fiscal year into the coffers of its largest shareholder, as it climbs up the capital."

"On the eve of Christmas, Vivendi announced that it had acquired 3% of Mediaset's capital, then increased it to 12% without ruling out reaching 20%. The French group eventually stopped just below 30%, the trigger threshold for a takeover bid. The investment is relatively small (1.3 billion euros), compared to the enormous funds that Vivendi had obtained from the earlier sale of SFR. However, the impact in Italy is immense. "We will defend ourselves against what is not a normal market operation, but a serious deception that undermines the very laws of the market," Fininvest, the parent company of Mediaset, reacted. Silvio Berlusconi explosively stated in the Financial Times that "Mediaset will remain Italian." And privately added, "They speculated on my death." This is because the former Prime Minister had undergone a delicate quadruple bypass surgery when Vivendi unleashed its attack. The issue has become so sensitive that La Stampa, the voice of the Piedmont industrialists, takes a stand: "To betray Silvio Berlusconi like this is to betray Italy.""

"Starting with the simplest tool to strengthen a capital position without spending money: capital reduction. All companies-large or small-resort to it, but none with the consistency of Vivendi. From 2015 onwards, more than 200 million shares repurchased by Vivendi were cancelled in four stages, mechanically reducing the number of its shares by 13%. If these operations-which benefit all shareholders, let's be clear-had not been carried out, Bolloré would have had to spend a whopping additional 1.4 billion euros (at the average exchange rate for 2021) to reach the same 27% stake that he currently controls."

"Just a few months later, unexpectedly: Vivendi refuses to honor the contract. The late Antoine Bernheim would probably have said, "the bride had the pox"... The very courteous Arnaud de Puyfontaine, CEO of Vivendi, may have expressed it a little less cavalierly (" We thought we were buying a Ferrari, and we end up with a Fiat Punto"), but the statement sent chills down the spines in Milan. And yet, it wasn't far from the truth: Mediaset Premium, supposedly losing 70 million in 2015, suddenly found itself on a trajectory of 200 million negative result each year. Almost as much as Canal in France! A nightmare that Vivendi did not want to replicate. Faced with this turnaround, the Italians sue for breach of contract, seeking 570 million euros in damages, then even 3 billion... Bolloré obviously retaliates, and in November, Vivendi declares itself "freed from its willingness to prioritize an amicable solution." It's war. And Bolloré is going to use its classic arsenal: the attack on the capital."

"indeed, this definition captures the unreadable Bolloré who decides everything, the unrepentant raider who launches his operations by tapping alone on his mobile phone, the leader who disregards all the group's bodies by his absence, but is very present on the bridge, in his sixth-floor office at Vivendi..."

"It reminded me of Sumner Redstone’s fierce dictum: never cede or sell control. When you sell you give up being on center stage. Edgar’s uncle Charles, after they sold out to Vivendi, said, “All my life wherever we would go, when the plane landed there’d be a Seagram representative at attention on the tarmac to greet us, and we’d roll into the city royally. Now all I am is just another rich guy.” I was very grateful to Edgar for having given me the chance to build up his television assets and was really sorry we’d become estranged. Thankfully, over time we repaired our relationship and will always be good friends."

"Nevertheless, Edgar decided to put Seagram up for sale. He worried I might be competitive or would somehow stall his desire to merge with a bigger player, so he never included me in their secret deliberations. A few months later, to the world’s shocked surprise, it was announced that Vivendi, a French water company that was being transformed by the ferociously and irresponsibly competitive Jean-Marie Messier, bought Seagram for nearly $35 billion."

"Play is itself quite a story. I founded it in 2005 at a time when in my opinion the Polish telecoms market was badly run, being dominated by big European companies, each of which was having to deal with tussles between its shareholders. Vodafone had a dispute with its Polish partner that ended with its Polish operation being bought by Polkomtel; France’s Vivendi and Deutsche Telekom’s T-Mobile were fighting over their asset in Poland; and France Telecom’s Orange was having a problem with its local partner. We saw an opportunity for a fourth player to start afresh and try to capture market share, so we sneaked into the market by buying telecoms licences. We didn’t bother with 2G and decided to bid only for 3G licences. It was unheard of for a private equity company to buy licences without any experience in building the infrastructure. But we found Netia, a small fixed-line independent, to help us as a local player in the Polish market. We ended up outbidding 3, the mobile phone provider backed by Hong Kong’s Hutchison Whampoa. The key to making this work was getting funding, which we did principally from China Development Bank. We had spotted in our privatisation and tender processes for upgrading Bulgaria’s telecoms that the Chinese government has a long-term strategic plan to become a major player in telecoms infrastructure. We saw that the best kit was coming from Chinese subcontractors, so we went straight to them and found that they had big plans. We had big plans too and suggested that we work together, building a new mobile telecommunications infrastructure in eastern Europe’s biggest country, with a population of 40 million. The Chinese like to take a long-term view, so we signed a letter of intent in China at the same time as we were bidding for licences. I used the occasion of an official state visit from Iceland to China to get the deal rubber-stamped, and so in the Palace of Heavenly Peace in Tiananmen Square there was an official signing ceremony as the climax of the state visit. We signed a letter of intent to buy all the equipment from Huawei, which has since emerged from the shadows as a dominant player in global telecoms, and it lobbied China Development Bank to make its first ever major loan in Europe. In total, this loan amounted to more than $1 billion. I have a great picture of the deal being signed by us and Huawei with the presidents of Iceland and China standing behind. It was an occasion that I am sure went a long way towards getting China Development Bank’s support and resulted in Huawei sending an army of Chinese engineers to Poland, where they helped us set up the towers, transmission and other infrastructure from scratch. We entered Poland as outsiders and targeted the youth market. It was tough going for the first two years but our patience paid off, and after about four years we broke even. Today, Play is profitable and growing significantly. It now has more than 11 million customers and a 20 per cent market share…"