22 APR 2020

VIVENDI ACQUIRES 10.6% STAKE IN LAGARDÈRE

The acquisition followed the recent sale of 10% of the company's 100% share capital of Universal Music Group (UMG) for an enterprise value of €30 billion. It was brought up by Lagardère’ and former French president Nicolas Sarkozy served as an intermediary, and A price for the deal has not been revealed.

Share

Following the recent sale of 10% of its 100% share capital of Universal Music Group (UMG) for an enterprise value of €30 billion, Canal+ owner Vivendi said it acquired 10.6% of Lagardère on Tuesday. No price has been revealed. Vivendi considers the acquisition as a “long-term financial investment reflecting its confidences in the future prospects of the French group, which enjoys international leadership positions in its businesses and which, like many others, is experiencing difficult times at the moment."

The acquisition came ahead of the Lagardère AGM on 5 May. The investment is Lagardère’s invitation and former French president Nicolas Sarkozy, who knows both Lagardère and Vivendi’s main shareholder Vincent Bolloré, acted as an intermediary. Last year, Lagardère sold its main TV interests to M6 Group, including leading kids channel Gulli, with Vivendi and Groupe Les Echos – Le Parisien teaming up to acquire classic music channel Mezzo in a separate deal. Each of Vivendi’s businesses is closely looking out for updates on the COVID-19 pandemic. According to the company, it is impossible to determine with certainty how it will impact revenues and annual results. However, the revenues of certain businesses, such as Havas Group, Editis, and Vivendi Village, are expected to be affected in the second quarter of 2020. 

Vivendi is now the third-largest shareholder in the group after Amber Capital, which controls an 18% stake, and the Qatar Investment Authority, with 13%. It announced quarterly earnings with solid sales in music (UMG) and television (Canal+) offsetting weakness in advertising and publishing. It noted that Tencent of China, which bought the 10% stake in UMG, has the option to pick up another 10% in March of 2021. 

Lagardère received a separate investment from another acquaintance of Arnaud Lagardère, e-commerce outfit Webedia’s owner, Marc Ladreit de la Lacharrière, who has taken a small stake thought to be around 3%, under a 5% threshhold. It also sold its main TV interests to M6 Group last year, including kids channel, Gulli with Vivendi and Groupe Les Echos–Le Parisien teaming up to acquire music channel, Mezzo in a separate deal. It retains ownership of radio assets in the shape of the Europe 1, Virgin, and RFM radio stations, and also owns major event spaces  as well as publishing outfit Editis. The company has been under assault from activist investor Amber Capital, which has been trying to change the company’s management led by Arnaud Lagardère. The group's main tasks, publishing, and travel retail have been severely impacted by the outbreak.