Vivendi and Lagardere in merger speculation

21st July 2004, Comments 0 comments

PARIS, July 21 (AFP) - Shares in the French media group Vivendi Universal and Lagardere rallied in mid-day trade Wednesday following a press report that they were in talks on a possible merger, dealers said.

PARIS, July 21 (AFP) - Shares in the French media group Vivendi Universal and Lagardere rallied in mid-day trade Wednesday following a press report that they were in talks on a possible merger, dealers said.  

Vivendi shares were up 3.82 percent at EUR 21.75, while Lagardere, which has interests in publishing, defence and space technology, had gained 2.3 percent to EUR 50.65.  

The Paris CAC 40 index of leading shares was 1.33 percent stronger overall.  

The French weekly newspaper Le Canard Enchaine reported earlier, without quoting sources, that the companies have consulted lawyers to find out whether Lagardere can retain its partnership structure following a merger.  

Exane BNP Paribas analyst Jean-Christophe Liaubet reiterated his 'buy' rating on Vivendi Universal, saying the report has renewed speculation that the British mobile giant Vodafone could launch a full bid for Vivendi or for Vivendi's stake in their joint telecommunications unit Cegetel SFR.

"In any case, these rumours may precipitate a move by Vodafone that would be more attractive to shareholders," Exane BNP Paribas said.  

Exane commented that a Vivendi-Lagardere deal would appear to be a political move, aiming at preserving the French nationality of assets, while Vivendi could seek such a tie-up in order to protect itself from a hostile bid.  

"Even though the rumour looks credible ... we believe that such a deal is far from being done because of issues on limited partnership," the brokerage added.  

Vodafone chief Arun Sarin has repeatedly said his group is interested in taking control of Cegetel and its lucrative mobile unit SFR.  

Under the draft plan, Vivendi Universal chief executive Jean Rene Fourtou would head the new entity for two years before giving way to Lagardere chief executive, Arnaud Lagardere, the press report said.  

It added that a merger would allow Vivendi to buy the 43.9 percent share of Cegetel SFR currently owned by Vodafone.  

One Paris analyst said: "The merger would make sense for Lagardere, because the group would get its foot into television. It is also positive for the French government because France would have a major player in the sector.  

"But I do not see the interest for Vivendi Universal at this time."  

Vivendi declined to comment on the report.

 

© AFP

 

Subject: French news

0 Comments To This Article