Vincent Bollore, Chairman of the Supervisory Board of media group Vivendi, attends the company's shareholders meeting in Paris
FILE PHOTO: Vincent Bollore, Chairman of the Supervisory Board of media group Vivendi, attends the company’s shareholders meeting in Paris, France, April 19, 2018. REUTERS/Charles Platiau

PARIS (Reuters) – Billionaire Vincent Bollore will further withdraw from Vivendi’s management at a crucial time for the French media giant, which is struggling in Italy and is weighing the sale of Universal Music Group (UMG).

Bollore, Vivendi’s number one investor, will be replaced by his son Cyrille in April at the board, following a vote by shareholders, the group said. The appointment will come just a year after another son, Yannick, succeeded the French tycoon as chairman.

The surprising move comes three years ahead of the date Bollore, 66, had set for himself to hand over all of his businesses to his four children.

“There’s a new generation which is coming, new blood,” Vivendi’s chief executive Arnaud de Puyfontaine said in a call with analysts. “The most important thing is that we have the long term commitment of our number one shareholder.”

Bollore, who made his fortune through shrewd investments via his family-controlled listed group, first entered Vivendi’s capital in 2012 and gradually increased his stake to 26 percent, a level that allows him to effectively control the company.

His replacement at the board does not imply a full departure from the group, a source close to the matter said, without elaborating.

Bollore’s two sons will preside over the future of Vivendi’s holdings. Under the billionaire’s tenure, Vivendi, acting as an investment vehicle, undertook a whirlwind acquisition spree in the fields of video games, advertising and telecommunications, including a 24 percent stake in Telecom Italia (TIM).

ITALY’S WOES, UNIVERSAL HITS

That investment, Vivendi’s biggest, has not yet born fruit, as TIM has been caught up in a battle between the French company and U.S. activist fund Elliott since early last year over how to revive Italy’s biggest phone company.

Vivendi had to take an eye-watering 1.1 billion-euro (970.8 million pounds) write-down on TIM’s shares in 2018, it said on Thursday, even as its core operating profit jumped by about 25 percent to 1.29 billion, mainly on Universal’s strong performance.

The label’s performance contrasted with that of Vivendi’s second-biggest division, pay-TV Canal Plus, which missed its profit target for the year and has now fewer subscribers in France than U.S. video streaming platform Netflix.

Vivendi is benefiting from the success of music streaming platforms such as Spotify and sale hits by artists such as Drake, Post Malone and The Beatles.

Universal’s soaring profits are the key driver of Vivendi’s stock and have fuelled market speculation about Bollore’s intentions regarding the division. The group confirmed it wanted to sell up to 50 percent of UMG, which analysts value between 20 to 40 billion euros, to one or several strategic partners.

Revenues grew by 4.9 percent at constant currency and perimeter to 13.9 billion euros, roughly in line with market expectations.