CANNES, France, June 23 (Reuters) - A tie-up between French media giant Vivendi and advertising group Havas has no business rationale and could risk a conflict of interests, Publicis Chairman Maurice Levy said on Friday.
French tycoon Vincent Bollore’s merger of Havas, run by his son Yannick, with Vivendi is scheduled to close in two weeks. He controls both via stakes owned by his family-run conglomerate Bollore Group, and the 2.3 billion-euro deal consists of Vivendi buying up Bollore’s stake in Havas.
“Bollore’s strategy is very clear. It’s a wealth management strategy,” Levy said in an interview in Cannes.
Asked whether this meant the transaction had no business rationale, Levy said “It’s just my personal opinion.”
Havas Chief Executive Yannick Bollore said on Thursday the deal to create the Vivendi-Havas entity - which would include Universal Music Group, France’s biggest pay-TV group Canal Plus and Havas - could create at least 390 million euros in value. He did not elaborate.
Levy also pointed to the risk of conflicts of interests because the deal would see a media group taking control of an advertising group.
“This is badly perceived by advertisers, because advertisers don’t like having media controlling an ad agency or an ad agency controlling media,” Levy said. “They don’t like this kind of mixture because it casts suspicion on the way advertising investments are made.”
Yannick Bollore, who was lined up by his father to be Vivendi’s next CEO, brushed off criticism on Thursday.
“The only conflict of interest concerns the media buying capabilities,” Bollore said. “Havas clients represent 0.5 percent of (Vivendi) revenue.”
“The engagement we have with clients is to be transparent, as we’re doing in France,” he added.
WPP’s boss Martin Sorrell said combining media and advertising would make sense provided it is transparent to clients. But he was sceptical about the value the deal could create.
“They say by coming together, they would create value,” Sorrell said in an interview on Friday. “They had the opportunity to do that...But, you know, maybe they’ll make greater efforts this time.”
Vincent Bollore, 65, has stated his plan is to hand over his majority-owned Bollore Group to his four children in 2022, the year of the conglomerate’s bicentenary.
Four years ago Yannick, 37, became chief executive of Havas, which is 60 percent-owned by Bollore, and last year he joined Vivendi’s supervisory board, chaired by his father.
Editing by Susan Thomas