Vivendi Chair, Investor Feud Over CEO Search

The chairman of French media and telecom conglomerate Vivendi and one of the company's other powerful board members are locked into a showdown over who should be the next CEO, a source confirmed Monday.

Jean-Francois Dubos last year became CEO on a temporary basis after previous head Jean-Bernard Levy left amid disagreements over future strategy. Dubos was charged with developing a strategy for Vivendi and rejig its business portfolio in line with it. The company has since refocused on its content assets and decided to divest its majority stake in video game maker ActivisionBlizzard and its stake in Maroc Telecom. It has also signaled it could look for a spin-off of French telecom firm SFR down the line.

That could leave Vivendi focused on Universal Music Group and French pay TV company Canal Plus before possible acquisitions.

French newspaper Les Echos reported late Sunday that Vivendi chair Jean-Rene Fourtou wanted to bring in Bertelsmann CEO Thomas Rabe to run the conglomerate. Via deals and a push into new sectors and emerging markets, Rabe has been looking to boost the German media giant's financial growth.

But large Vivendi shareholder Vincent Bollore, who also sits on the board, has thrown his hat into the ring as the next CEO, Les Echos said. He was previously seen as a possible future chairman, but his goal now is to stop the board from making a decision on a new CEO too quickly, even though he has so far supported the company's asset strategy, the paper said.

The Wall Street Journal later reported that when Fourtou started the search process for a permanent CEO by picking a recruitment firm without announcing a time for his own departure, Bollore saw that as a challenge and "power grab."

The nominating committee of Vivendi board is expected to meet on Wednesday to talk about the CEO search. The full board is meeting on the topic later this month.

Vivendi wasn't immediately available for comment.

A Bertelsmann spokesman said: "Thomas Rabe is Bertelsmann CEO, and he isn't available for any other position."

"Vincent Bollore recently stepped down as chairman of [advertising giant] Havas (to be succeeded by his son, Yannick), which seemed a strange decision at the time but now makes sense in the light of this development," said Liberum Capital analyst Ian Whittaker.

Bollore is Vivendi's largest shareholder with a 5 percent stake, plus he sits on its board. "It is likely other CEO candidates may be deterred from standing, given the political considerations," Whittaker said.
"Therefore Mr. Bollore could become CEO, almost by default."

He said that Bollore has supported asset changes at Vivendi, but "is dissatisfied with the slow progress of the restructuring." Added the analyst: "A Bollore CEO is likely to accelerate the break-up process, with GVT (the Brazilian broadband/pay TV business) and SFR (the French telecom business) the areas of attention."