Bad Habits

22 July 2004 By Bill McIntosh

So it’s good that talks don’t seem to have got very far. The only worry is that bad ideas sometime resurface particularly when they appeal to French politicians.

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Vivendi Universal and Lagardere held talks about a possible linkup but these have come to nothing, according to press reports.

Le Canard Enchaine said a deal had the blessing of the French government. Part of the attraction was that it would stop SFR, Vivendi's majority owned mobile telecoms subsidiary, falling into the hands of Vodafone, the minority investor.

Meanwhile, the Wall Street Journal quoted an unnamed source close to Vivendi as saying that the merger was an idea that had some logic, but did not look possible.

A source close to Arnaud Lagardere, the chairman of Lagardere, told the WSJ that discussions had been held, but said that Lagardere would not give up his voting control over the company. Despite owning only 5% of the company's stock, Mr Lagardere exercises control through a French legal mechanism called a commandite des actions.

Lagardere is a minority partner in payTV group Canal Satellite with a 34% stake. Vivendi owns the remaining interest.

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