From a tycoon in a hurry, Jean-Marie Messier has become a tycoon on the run.
The boss of Vivendi Universal – self-styled "Maître du Monde" (master of the world) – broke off his holiday in the Rocky Mountains yesterday to return to Paris.
The real surprise should perhaps be that Mr Messier, 45, thought it was possible to have a holiday at all. Having built Vivendi in six years from a French water treatment and supply company into one of the largest and most disparate media groups in the world, Mr Messier finds that his reputation is leaking water rapidly on both sides of the Atlantic.
The annual shareholder meeting in Paris next Wednesday is likely to be a tempestuous affair. Depending on the success of Mr Messier's strategy – to make concessions and blame his troubles on false rumours spread by "hedge" funds – the most meteoric French business career of recent years may be heading towards a spectacular recovery or a rapid conclusion.
There was even talk in Paris yesterday of a big shareholders' revolt, led by Claude Bébéar, president of the French insurance giant AXA. Mr Bébéar is said to believe that it is time for Mr Messier to be reined in, even confined to a non-executive role.
An informal meeting of the Vivendi board of directors is planned in Paris on Tuesday, just before the shareholders' meeting. The French newspaper Le Monde reported yesterday that a number of possibilities would be considered, ranging from placing Mr Messier "under surveillance" to making him a non-executive president.
Vivendi's share price has been battered by a series of seeming panic asset sales and doubts about the coherence of a group that owns everything from Universal Studios in Hollywood to French water-works, from British suburban railway services to the rapper Eminem and the veteran "rockeur" Johnny Hallyday. Last month, the company announced the largest single loss – €13.6bn (£10.8bn) – in French corporate history, swollen by write-downs on acquisitions and the need to adopt American accounting rules to become a US-quoted company.
At just more than €38 a share, Vivendi's value has plunged by 40 per cent since January. The share price is now scarcely higher than it was in 1997 before Mr Messier embarked on a spectacular series of purchases ranging from Universal to the Canadian music and media (ex-drinks) group, Seagram, and the French cable television group, Canal Plus.
Strangely, perhaps, Mr Messier's troubles have been greeted in France with something approaching delight rather than alarm. In recent months, Mr Messier, who likes to be known as "J2M", after his initials – has infuriated many people in his native country (where business success is, in any case, no guarantee of popularity). In the eyes of French opinion-formers, the Vivendi boss has committed two unforgivable faux pas.
He announced last year that he was setting up office and home in New York. He declared, or seemed to declare, at a press conference in the US in December that the French struggle to protect its cinematic and musical traditions from American oppression was "dead". (In truth, Mr Messier did not quite say that. He said that the defence of French exceptionalism, alone, was pointless. Global media conglomerates, like his, should seek to promote and market the best in the cultural traditions of all countries.)
Mr Messier's troubles were compounded by the resignation last week of Denis Olivennes, a much respected Vivendi executive, responsible for Canal Plus. Yesterday the station's chief, Pierre Lescure, also departed.
Since the struggling cable TV company is one of the biggest investors in new French movies (£100m a year), Mr Olivennes' departure was seen in France as another nail driven into the coffin of French cultural exceptionalism.
The argument with Mr Olivennes (who resigned in a three line e-mail) seems to have been more about Mr Messier's autocratic style of management and his insistence that Canal Plus should break even within two years. The Vivendi boss is said by insiders to believe that Canal Plus should be more inventive and spend more on creativity, not less. That is not the way the story played in France.
With all these troubles, and with the shareholders' meeting approaching, this was not perhaps the best moment to announce a €2bn package of stock options for Vivendi senior management, however routine.
The small shareholders revolted. So, according to one account, did many executives within the company.
Earlier this week, Mr Messier tried to douse this fire. Vivendi issued a statement saying that there was no quarrel between its remaining executives, over stock options or anything else. Mr Messier announced that he would not take up his own portion of the options unless the Vivendi share price had climbed back to €60 by September and so long as the market as a whole did not collapse.
All in all, the Vivendi, and Messier, story is one of profound and as yet unresolved conflicts in French and American styles of business. Vivendi is an attempt to create a new kind of French company, but its culture, and Messier's, remains rooted in the autocratic, opaque traditions of the semi-public companies and complex family holdings that have traditionally dominated the French corporate world.
Mr Messier himself is a classic French technocrat by training, who has tried to reinvent himself as a global entrepreneur, a kind of Gallic Ted Turner or Rupert Murdoch. Rather than start his own business, he set out to transform the one that he already ran.
In doing so, according to his critics, he decided to make himself into a kind of media star, making the front page of magazines from Paris Match to Time. He took less care, however, to communicate his strategy, if he had one, to the real players in the business world, from analysts and fundholders to senior business journalists, or even his own shareholders.
The Compagnie Générale des Eaux was a French institution and a typically French hybrid, a private utility company, created by edict of the Emperor Napoleon III in the mid 19th century. When Mr Messier took over in 1996, the company had already diversified into waste-treatment, energy and transport, such as the Connex company, which owns British railway franchises.
Mr Messier plunged into a rapid transformation of the company into a media and communications giant, which he rebaptised Vivendi (now, by some estimates, the second-largest media company in the world). Unlike Ted Turner or Rupert Murdoch, Mr Messier had little background as an entrepreneur.
Born in Grenoble in 1956, the young Mr Messier took the traditional route of a brilliant, young French provincial into the Paris elite.
He went to the Ecole Polytechnique (nominally an engineering school, actually a springboard into business or politics) and then the celebrated (or notorious) civil service college, the Ecole Nationale d'Administration (ENA). He graduated among the top ten in his year and was propelled into the high ranks of the civil service. (His ENA dissertation was a laudatory examination of Margaret Thatcher's early privatisations.)
After a couple of years as the youngest head of a ministerial private office in French history, he went into business, first with the Lazard bank and then Générale des Eaux.
Messier is married with five children. The family continues to live in France, although he announced, famously, that he was setting up home in a $17.5m (£12.2m) penthouse in Manhattan.
Not all Mr Messier's acquisitions have been disastrous. The Universal Music Group, which brings together Universal's music portfolio and the music interests of Seagram, is now the most powerful and successful music business in the world. The claimed "synergies" with other parts of the media business, such as Canal Plus and the mobile phone arm, Cegetel, are less obvious.
Most opaque of all is Vivendi's continuing activities, as Vivendi Environnement, in its original core businesses, which are now marginal in the group as a whole. There have been continuing rumours, even announcements, that Vivendi intends to divest itself of its water, energy and transport businesses. Nothing has happened.
Internal sources say that Mr Messier finds himself in a triple bind. He would like to dispose of them to raise cash and make the group more coherent but they are at once heavily indebted and useful and prolific sources of cash.
Critics say that this has been the problem with Mr Messier. Like a politician or a functionary, rather than a businessman, he talks too much and acts too little. By talking about his intentions, he has driven up the price of potential targets and driven down the price of assets that he plans to dispose of.
More talk from Mr Messier, his most brilliant to date, will be needed to get him through the shareholders' meeting next week. Beyond that, talk may no longer be enough.
NOT JUST A MEDIA CONGLOMERATE WATER, WASTE AND TRANSPORT DIVISION MAY BE SOLD
Vivendi Environnement, a 63 per cent owned subsidiary of Vivendi Universal, has operations in more than 100 countries. In 2000, Vivendi partially floated this business, which had revenues of some €29bn (£18bn) last year, but it remains unclear how the parent will reduce its stake to below 50 per cent, as it is committed to.
The capital gains tax issues that prevented earlier divestment of the business are now believed to have been solved. Vivendi will have to overcome French political sensitivities if it wants to sell to a foreign company but there appear to be no obvious buyers.
Vivendi Environnement works in four sectors – water, waste management (Onyx), energy (Dalkia) and transportation (Connex). It claims to be the world's number one in water, servicing 110 million people worldwide and 40,000 industrial customers.
In the UK, Vivendi Environnement operates three water supply companies in the South-East with a workforce of 3,500, providing water to 3.2 million people. Its Onyx business is one of the UK's leading waste management companies with 7,000 employees, serving 4.5 million residents.
Dalkia, with 2,700 workers, provides energy management services to industry and the public sector. Connex operates the South Eastern commuter rail franchise and with Connex Bus, employs 3,000 people in the UK.
Arguably also outside Vivendi's new focus on media, is its telecoms business, through a 59 per cent stake in Cegetel, which has 12 million mobile customers (through the SFR unit) and 2.7 million for fixed-line telephony. Vivendi also has Vizzavi, an internet portal operating in several countries including the UK,jointly owned with Vodafone.Reuse content