RPT-UPDATE 2-Bollore to join Vivendi board after raises stake

Tue Oct 16, 2012 10:45am EDT

* Raider known for shrewd investments in struggling companies

* Havas, Vallourec among key past holdings

* Shares show little immediate impact

* Entry could presage media tilt at Vivendi

By Lionel Laurent and Leila Abboud

PARIS, Oct 16 (Reuters) - French corporate raider Vincent Bollore will join Vivendi's board after lifting his stake to 5 percent, putting his restructuring skills at the disposal of the ill-fitting media and telecoms conglomerate.

Vivendi is reviewing its disparate portfolio of businesses in a bid to boost its stock price, which has hovered at decade lows this year, and cut its 14.1 billion euro ($18.2 billion) debt load.

Although the group insists it is in no hurry to make decisions on its future, it has also said there are "no taboos", so selling assets such as Brazilian telco GVT and video games maker Activision Blizzard or carving up the group in some other way could all be on the table.

The arrival of billionaire Bollore, known for his shrewd investments in struggling companies such as ad agency Havas and industrial tube maker Vallourec, will raise investor hopes he can apply his magic to Vivendi, which has struggled to fix on a strategy since a debt-fuelled buying binge under former CEO Jean-Marie Messier almost drove it to bankruptcy a decade ago.

The Bollore Group said on Tuesday that it held 66 million shares, or 5.01 percent of Vivendi, on Oct. 10, making it the group's largest shareholder. That's up from the 4.41 percent Bollore owned after the sale of its Direct 8 and Direct Star television chains to Vivendi on Sept. 27.

Vivendi Chairman Jean-Rene Fourtou said the group would now propose that Bollore join the supervisory board, a move expected since Vivendi's shareholder meeting in April when Fourtou said he would welcome Bollore's presence on the board.

The two men now set to write the next chapter in Vivendi's history have known each other for more than two decades as members of France's small circle of business elite. The targets of stake-building by Bollore have frequently seen their shares benefit, although the immediate impact on Vivendi's stock price was muted.

WHEN TO SELL

Vivendi shares were up 0.7 percent, about in line with a 0.4 percent rise in the European telecoms sector. So far this year the shares are down 3.4 percent, slightly outperforming the sector.

"Bulls are likely to point to the growing influence of Bollore as driving a shake-up of Vivendi," UBS analyst Polo Tang said in a research note. "However, we believe disposals may either take longer than expected to achieve or that prices may be lower than expected."

Bollore, 60, has had a long career as an activist investor involved in industries including finance, media, energy and transport, and is known for his tenacity, staying with Havas despite a bumpy road for the share since he took control of the ad agency.

He also has a nose for a timely exit.

"He's capable of knowing when to sell, when a stock has gone up enough, as was the case with Vallourec," one Paris-based banker said, referring to the car parts maker, which he mostly sold out of last year, realising a 141 million-euro gain. Its share price has more than halved since.

Even when Bollore doesn't get what he wants, he tends to make money. Analysts long expected him to seek to merge Havas with Aegis, another ad agency in which he owned a stake. Those plans were thwarted by Aegis management, but Bollore eventually doubled his investment, reaping a 450 million euro net gain when Aegis was sold to Japan's Dentsu.

Bollore has also loomed large on the Italian financial scene, where he heads up a group of foreign investors who jointly own a 10.9 percent stake in investment bank Mediobanca .

He remains vice chairman of insurer Generali, where he for years has wielded outsize influence via his Mediobanca stake.

Born in a Paris suburb, Bollore has often spoken of a passion for Italy and its companies that most recently manifested itself in an investment in car designer Pininfarina, which in turn made and designed the electric cars used in Bollore's burgeoning Paris car-sharing scheme, Autolib.

While Bollore's holdings have encompassed a wide range of sectors, it is his focus on media that has fed speculation that Fourtou aims to shed the conglomerate's telecoms assets and focus on businesses like pay-TV operation Canal Plus and Universal music group.

That could fit with a growing emphasis on media for Bollore, who has already installed his son as CEO of Havas.

"The ultimate goal for Bollore is to build a communication group that he will pass on to his children in about 10 years," a source close to the raider said recently. "His kids have no interest in the logistics traditional business, so his aim is to grow in communication."

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