The Bolloré group secured a victory in France's Supreme Court on Friday in a case that threatened the company with a costly mandatory public buyout offer for its subsidiary Vivendi, as the matter is now being sent back to the appeals court.

In this crucial case for the Paris financial market, the highest French court overturned an April ruling by the Paris Court of Appeal, which had found that billionaire Vincent Bolloré controls Vivendi and ordered the Financial Markets Authority (AMF) to re-examine the group's split at the end of 2024.

In July, the financial markets regulator had ultimately ordered the Bolloré group, controlled by Vincent Bolloré's family, to prepare a public buyout offer for Vivendi--a decision Bolloré has also appealed.

According to the Supreme Court, the appeals court misapplied the legal concept of de facto control over a company. The appeals court must now review the matter again.

"The Supreme Court annuls the appeals court ruling that found Vincent Bolloré exercised de facto control over Vivendi, as defined by Article L. 233-3, I, 3° of the French Commercial Code," the court stated in a press release.

The judges partially followed the opinion of Advocate General Irène Luc, who had recommended overturning the ruling, but without sending it back for further review.

The revelation last week by Le Monde of the Advocate General's position triggered a sharp reaction in the markets. Vivendi shares fell as much as 20% during the day.

Around 14:00 GMT on Friday, the volatile stock was up 0.36%.

CRITERIA FOR CONTROL

The Supreme Court held that the law "recognizes de facto control only in light of votes cast at shareholders' meetings; it does not consider any other criteria."

Lawyers for Vivendi and Bolloré on one side, and for CIAM on the other, clashed Tuesday in a high-stakes hearing.

Counsel for Vivendi and Bolloré insisted that Bolloré does not control Vivendi and argued that the court had exceeded its authority, while CIAM's lawyer urged the Supreme Court judges not to fall for a "formalistic" reading of de facto control, advocating for a "realistic and practical" approach.

Bolloré, Vivendi, and the Advocate General all argued that de facto control is only proven by holding a majority of voting rights at general meetings--something the Bolloré group does not have at Vivendi.

The Paris Court of Appeal, however, had ruled that de facto control could result from a range of indicators, such as Vincent Bolloré's reputation, experience, or personal authority at general meetings--a position supported by CIAM.

The Supreme Court sided with the former: "Since only the legislature has the power to set the criteria for de facto control, the appeals court could not rely on any criteria other than those listed by law," it stated.

In December 2024, Vivendi approved the spin-off and separate stock listings of its entities on various exchanges, including Canal+ in London and Havas in Amsterdam.

This split was approved by more than 97% of the group's shareholders, but faced strong opposition from some minority investors, notably the Paris-based fund CIAM.

CIAM argued that the terms of the spin-off did not comply with regulations protecting minority shareholders and that the planned partition would not create value for shareholders.

(Reporting by Florence Loève, editing by Kate Entringer and Sophie Louet)

by Florence Loeve