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Vivendi & Havas: The cousins will reunite

A much more positive outlook at Vivendi-backed pay-TV operator Canal Plus Group is helping Vivendi’s share price. One investment bank suggests this could add extra muscle to a long-expected ‘merger’ between Vivendi and advertising giant Havas.

Key to any deal is Vincent Bolloré (chairman of Vivendi’s Supervisory Board and Canal+) who has publicly discussed the idea of tie-up between Havas and Vivendi. Exane/BNP-Paribas says it thinks that the “cousins” could be reunited in 2017 with the potential of Vivendi bidding for Havas, a move the bank suggests is “increasingly likely”.

“There are strong inter-connection between the buyer and the seller (both controlled and managed by Bolloré Group / family). Also despite Bolloré being the largest shareholder of Vivendi, a deal involving a share exchange requires 2/3 majority and, thus, in our calculation, the need support from a substantial amount of Vivendi minorities shareholders (43-50 per cent).”

“Combining Havas with Vivendi could have merits, although it is an unusual move – not least due to the common control exercised by Bolloré. In this context and in the absence of reference point, shareholders should have a look at Vivendi’s approach to investments – both organic & M&A driven. We like some of the key organic initiatives such as Studio+ or the ‘re-boot’ of Canal France,” says the bank.

“Vincent Bolloré (and his family and Group) has taken economic, board and managerial control of Havas and Vivendi (and through Vivendi, of Telecom Italia). Some top executives are or have been working at both Havas and Vivendi. These strong ties make it logical, from Bolloré’s point of view, to bring Havas and Vivendi together.”

Vivendi on November 17th issued a €600 million bond for a seven-year period and which will help reduce the average maturity date for its debt to 4.5 years.

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