The break-up that could reshape Bolloré’s empire

One thing to start: BP has denied to senior staff that the board was “unduly harsh” in its decision to claw back millions of pounds in pay from Bernard Looney, in a move that underscores unease over the abrupt departure of the former chief executive.

And: Munich prosecutors have charged Wirecard’s former chief financial officer with fraud more than three years after the payments company collapsed in one of Germany’s biggest corporate scandals.

In today’s newsletter:

• Vivendi’s potential break-up

• Trian announces Disney board nominees

• Private equity sings the blues

French corporate raider shocks market with plan to split group

Vincent Bolloré spent years insisting his media conglomerate Vivendi was “a coherent company and not a disparate set of holdings”. But even the most feared corporate raiders sometimes have to admit defeat.

On Wednesday, the company announced it would explore splitting into three separate businesses, an unexpected holiday gift for investors who saw the shares jump more than 10 per cent following the news.

Investors have long been frustrated by the gap between its market capitalisation and the sum of its parts, which has been steadily expanding. It almost doubled since the spinout of the group’s most valuable business, Universal Music Group, two years ago.

“Despite all the work that’s been done, Vivendi has not managed to reduce the discount. So at a certain point you have to be pragmatic,” said a person close to the company.

The conclusion of a year-long corporate battle to buy rival French media conglomerate Lagardère Group last month has given the billionaire more time to plot the next chapter of his empire.

It also means Vivendi, whose portfolio includes French pay-TV Canal+, advertising agency Havas and a stake in Telecom Italia, has more time to contemplate making a more radical change. 

“The portfolio is more diverse than it used to be with exposure to industries outside of media and entertainment,” wrote Silvia Cuneo, an analyst at Deutsche Bank.

Vivendi says the break-up plan could see Canal+ and Havas become separately listed companies. Lagardère and other media and entertainment stakes would form the third listed entity.

A separation could give the Vivendi empire more capacity to grow and do deals using their share capital. It could also make it easier for the Bolloré family holding company to increase its stake in one of the three smaller entities.

DD’s money is on the media portion. The conservative tycoon has spared little expense in taking on French mainstream media, and with Lagardère comes a trove of influential titles including Journal du Dimanche, the celebrity magazine Paris Match and Europe 1 radio.

Peltz vs Disney, the sequel

The stage has been set for a battle between Nelson Peltz, the founder of activist fund Trian Partners, and Disney chief executive Bob Iger. 

The New York-hedge fund announced on Thursday its intention to nominate two board members at the company’s annual shareholder meeting next year — Peltz himself and Jay Rasulo, a former Disney executive.

Rasulo, who was once considered a potential successor to Iger, is a smart choice for Peltz.

One of the reasons Disney has given for denying Peltz board representation is that he doesn’t have enough experience in the sector. Now Peltz has brought someone with him who spent almost three decades at the company and served as its chief financial officer from 2010 until he resigned in 2015.

Trian first said it would launch a proxy contest at Disney in January after Iger declined to put Peltz on the board. It’s worth remembering that the company had just months earlier reached a deal with another activist, Third Point, to add former Meta executive Carolyn Everson. 

Peltz then famously called the whole thing off during a live interview in February, even taking time to wish Iger a happy birthday. He said the Disney chief executive had promised to make changes suggested by Trian, including cutting costs and getting the streaming business to profitability, and wanted to see how those would play out. 

On Thursday, Trian gave its verdict. “Disney has woefully underperformed its peers and its potential,” the firm wrote in a statement.

Private equity’s music binge: shake it off

Paying homage to Taylor Swift’s Eras Tour, Blackstone’s annual holiday video takes clients on a cringe-inducing musical odyssey celebrating “The Alternatives Era” — chief executive Stephen Schwarzman in a sparkly rainbow jacket and all.

Behind all the merriment, however, the music business has been less than kind to private equity as of late.

In the span of just one week in October 2021, Blackstone, KKR and Apollo Global Management collectively poured more than $3bn into buying music. Two years later, they have yet to spend the full sums they committed, according to several people familiar with the matter and an analysis by the FT’s Anna Nicolaou and DD’s Eric Platt.

Rising interest rates are a key reason for the slowdown, causing catalogue prices to fall and making it harder for investors to justify loading the assets with debt.

KKR has not bought music for at least a year, according to a person familiar with the matter. Its $1bn partnership with BMG had only struck “a handful” of deals, this person said, including for songs by ZZ Top and John Legend.

Apollo had not made a new equity investment in song royalties for at least two years, according to a person familiar with the matter. Blackstone has spent a bit less than $700mn of its $1bn target on catalogues like Justin Bieber, but is also embroiled in a shareholder revolt at music investor Hipgnosis, as DD explained a few months ago.

The music hasn’t died off entirely. Carlyle recently beat out HarbourView and Blackstone’s Hipgnosis for Katy Perry’s catalogue with a bid for $225mn, according to several people familiar with the auction.

Still, most can agree that the heady days of 2021 are a thing of the past. “Lots of money was raised in unstable hands, in funds that promised massive multiple expansions, and that’s going to create instability,” said one large investor.

Job moves

• Thames Water has appointed Chris Weston, former head of power supplier Aggreko, as chief executive. The company has been without a permanent leader since Sarah Bentley quit after a boardroom row in June.

• UBS co-head of investment banking Ros L’Esperance will lead a new so-called executive client group of top dealmakers targeting high-profile clients, Financial News reports.

Smart reads

How Farfetch fell out of fashion The fallen luxury ecommerce darling is facing administration if a “white knight” investor fails to emerge, the FT reports.

The sound of chaos Spotify has come under increasing pressure as it struggles to make a profit, the FT’s Anna Nicolaou writes, which has left thousands of staff without jobs.

Stuck in transit A historic audit deal struck last year, which saved hundreds of Chinese companies from being kicked off US stock exchanges, has failed to herald a resurgence of initial public offerings between the two countries, Bloomberg reports.

News round-up

Apollo, Carlyle and KKR weigh bids for Pension Insurance Corporation (FT)

US fund Corvex urges Entain to turn around ‘unacceptable’ performance (FT)

Campari buys Courvoisier Cognac from Beam Suntory (FT)

How Austria’s political elite helped René Benko’s rise (FT)

Punchbowl News strikes deal to buy data start-up (New York Times) 

Country Garden sells Chinese mall stake as developer tackles offshore debt (FT)

Blackstone goes all-in on Taylor Swift fandom with holiday video (Bloomberg)

The year in IPOs, charted (Alphaville)