Bolloré’s Havas to use Amsterdam listing to fuel M&A
Stock market offering is part of a planned three-way break up of parent company Vivendi
Havas, the advertising agency, will consider “significant” merger and acquisition deals once it has completed its stock market listing in Amsterdam next month, according to Yannick Bolloré, the billionaire boss of parent company Vivendi.
The listing is part of a planned three-way break up of Vivendi aimed at addressing what Bolloré said was a sharp share price discount to the value of the company. He said the conglomerate structure had made it difficult to “unlock the full potential” of the business, which also includes Canal+ television and the Louis Hachette publishing division.
Bolloré, whose family will own about 30 per cent of Havas once the listing is completed, said the company’s shares could become a valuable way to fund acquisitions. Havas is among the smallest of the group of global advertising agency networks that also includes IPG, Publicis and WPP.
“If you open up the idea of paying part in shares, you can have bigger potential targets,” he told the Financial Times in London ahead of an investor day. “We don’t have any discussion with significant partners today but it’s the kind of opportunity that could be opened up.”
Vivendi has put in place a structure to prevent any hostile takeover of Havas by the use of a Dutch corporate ‘stichting’ mechanism that in effect stops unwanted approaches or stake building. Bolloré said this would also provide stability for staff and clients. “That’s why we created this stichting, and that’s why we have chosen [Amsterdam],” he said.
Even so, Bolloré said Havas was “big enough to compete with our peers”, noting its 23,000 staff in more than 100 countries and close to €3bn in revenues. “It’s not a small boutique,” he said.
He continued: “It’s a great moment in time for Havas to be listed again. It will create opportunities of accelerating external growth, it will give us more visibility, it will be good from a business standpoint, and it will also help to align fully the interest of senior leadership teams with investors.”
The proposed demerger of Vivendi, in which Bolloré is the main shareholder with just under 30 per cent, would also involve floating Canal+ in London and publishing division Louis Hachette Group in Paris.
Bolloré said Vivendi, which will remain listed in Paris, would be left with a “strong portfolio of investments” worth some €6.5bn and debt of a little under €2bn.” It . . . is still a pretty significant company,” he added.
He also said that Vivendi would return to dealmaking. “Once the split is done, Vivendi can focus again on taking stakes and creating value for its different assets.”
Vivendi will put the proposed demerger to a shareholder vote in early December and push ahead with the listings shortly after if the plans are approved.
However, Paris-based asset manager CIAM has raised concerns that minority shareholders will take a hit and that the plan would not achieve its aims of closing the conglomerate discount.
CIAM is also concerned that the listings are a strategic move by the Bolloré family, led by Yannick’s father Vincent, given Vivendi has chosen listing locations where the spin-offs will be exempted from rules that force shareholders to make an offer on the whole company above a certain ownership level. This could potentially give the family an opportunity to increase its control.
Bolloré controls both Vivendi’s board and the share capital with a minority stake, and has previously attracted scrutiny over issues of corporate governance. The billionaire has hit out at criticism, saying that “investors are very pleased with the idea of a split”.
He declined to comment directly on the option of the family increasing its stake in the various spun-off groups, but added: “We believe it’s important to maximise the value of every entity. And we believe it’s important to have a diversified investors portfolio.”