Vivendi and Havas have something in common: they are both controlled by Vincent Bolloré's group, which owns 20% of the former and 60% of the latter. Today, the shares of the two companies soar on the Paris Stock Exchange after the telecommunications giant yesterday launched a surprise offer to take over 60% of the advertising company in markets that were closed. The share of Vivendi flies by more than 5% (+5,8% to 19,46 euros) and that of Havas by 10%, reaching 9,33 euros.
This is a higher value than that offered by Vivendi, which he put €9,25 into the pot for each Havas share, a sum that values the advertising company approximately 3,88 billion, including a premium of 8,8% on the May 10 closing price. Net of the 0,18 euro coupon announced by Havas, the premium rises to 11,2%. Compared to the average price of the last month, Vivendi has offered 11,5% more and compared to the average price of the last year the premium rises to 20,6%.
A good deal for Bolloré, which in the transaction he appears both as seller and as buyer. Not to mention that his son Yannick, who is the managing director of Havas, already sits on the Board of Directors of Vivendi and will continue to exercise an operational role in the French media giant, which among other things controls 24% of Telecom Italia and 28,8 % of Mediaset.
With this operation, Vivendi hopes “to launch a new phase of development – reads the press release – in order to accelerate the construction of a world leader in content, media and communications” and wants to “keep the job”. The offer "will be financed with recourse to available liquidity".
If the operation is successful, Vivendi will file a simplified tender offer on the remainder of Havas' equity at the same price. Vivendi has specified that it does not however intend to withdraw Havas from the list. The idea of a rapprochement between the two groups is nothing new: "It is clear that one day something will happen between Vivendi and Havas", Vincent Bollorè said a year ago. These alliances make sense, observers say, as ad agencies like Havas specialize in short-form content, while Vivendi is launching new short-video offerings for mobile devices.
As for the quarterly accounts, Vivendi ended the quarter with an 88,3% decline in net income, to 101 million euros, following extraordinary charges (in the first quarter of 2016 it had instead recorded a capital gain of 576 million before tax). On the other hand, adjusted net profit increased by 57,2% to 155 million. This was communicated by the company, whose turnover grew in the period by 6,9% to 2,66 billion (+3,4% at unchanged structure and constant exchange rates).
Vivendi also confirmed the 2017 targets of an increase of more than 5% in turnover and, thanks to the measures taken in 2016, a 25% increase in Ebita (adjusted operating result). At the end of March, Vivendi's liquidity amounted to 4.016 million, from 5.070 million at the end of December. The French company added that it also has a credit line for 2 billion.
The news also arrived today that the French tax authorities were sentenced to repay more than 315 million euros to the transalpine media giant, in the context of a dispute over tax breaks from which the group has benefited. This is what the Montreuil administrative court decided: “The company Vivendi was exempt from paying additional taxes – reads the sentence according to Afp reports – that it had been charged at the end of the 2012 financial year as well as penalties and interest for the total sum of 315.464.624 euros”.
In 2011, the French parliament had eliminated a tax break – the so-called consolidated global benefit (BMC) – which allowed some large groups to reduce their tax levy by consolidating the losses of foreign subsidiaries in their accounts. The administrative court considered that Vivendi could report these tax credits in the 2012 financial statements accrued by 31 December 2011.
