Bollore makes first step to merge Vivendi and Havas with 2.4 billion euro deal

PARIS (Reuters) - French tycoon Vincent Bollore took a first step on Thursday in his attempt to merge media giant Vivendi and advertising company Havas, two groups he controls through his family-run conglomerate.

Vincent Bollore, Chairman of media group Vivendi attends the company's shareholders meeting in Paris, France, April 25, 2017. REUTERS/Jean-Paul Pelissier

Vivendi said it was making an offer to buy Group Bollore’s 60 percent stake in advertising group Havas for 9.25 euros a share, a premium of 8.8 percent over Wednesday’s closing price, in a 2.36 billion euro (2.01 billion pounds) deal.

The combined entity would represent more than 13 billion euros in annual revenues and add a new business to the Vivendi group, which owns Universal Music Group (UMG), one of the top three world record labels, and France’s number one pay-TV Canal Plus.

The offer values Havas’s total equity at 3.9 billion euros.

If Bollore’s conglomerate agrees to sell its stake in the ad company, Vivendi plans to launch a simplified public tender offer on the remaining 40 percent of Havas at the same price, without seeking to delist the company, it said.

Vivendi said a merger with Havas would strongly increase its group margins but did not provide details on the potential synergies between the two groups. It said it aimed to close it by the end of June, beginning of July.

Vincent Bollore, Vivendi’s chairman and controlling shareholder with a 20.65 percent stake, has pledged to turn the group into an integrated European media powerhouse and has launched a spree of acquisitions, including in Telecom Italia and Italian broadcaster Mediaset.

Havas, led by Bollore’s son Yannick, was one of the two top targeted businesses in Vivendi’s next expansion phase, two sources close to the matter said last month.

“Our groups evolve in a common world, some of our teams already know each other and our cultures look alike and complete each other,” the Havas CEO said in an internal email obtained by Reuters.

Separately, Vivendi said its first-quarter core operating profit plummeted by 34 percent from a year earlier at constant currency and like for like sales to 149 million euros, as UMG’s soaring results did not offset operating losses at Canal Plus’ French channels.

That missed a Reuters poll average of 165 million euros.

Pay-TV company Canal Plus said it expected an improvement of its French activities in the second half. The Vivendi unit has set an earnings before interest, tax and amortisation (EBITA) target for the year of 350 million euros.

Canal Plus suffered a blow earlier on Thursday when it was beaten by telecoms and cable holding company Altice in securing the rights to broadcast European Champions League soccer matches until 2021 in France.

Vivendi also confirmed its full-year targets, which include a 5 percent increase in its revenues and a 25 percent rise in its EBITA.

($1 = 0.9204 euros)

Reporting by Mathieu Rosemain and Gwenaelle Barzic, Editing by Dominique Vidalon and Susan Fenton