The prospect of a mandatory takeover bid for Vivendi has receded following a judicial decision. On Friday, France's Court of Cassation announced it had overturned a ruling by the appeals court that found Vincent Bolloré exercised "de facto" control over Vivendi--a decision that now appears to rule out the possibility of a public withdrawal offer for the conglomerate.

In a statement published on its website, the highest French court determined that the law only recognizes control based on votes cast at a general meeting, without considering any other criteria.

Previously, in April, the appeals court had ruled that de facto control could be inferred from a range of indicators, such as Vincent Bolloré's reputation, his professional background, his sons' involvement, or his personal authority at Vivendi's general meetings.

The court had then concluded that the Bolloré group, Vivendi's largest shareholder with 29.9% of the capital, effectively controlled the company. This led France's financial markets regulator, the AMF, to require that a public withdrawal offer for Vivendi shares be filed within a specified six-month period.

With this decision now overturned, a differently composed appeals court will have to rule again on the issue of de facto control.

From an analyst's perspective, a takeover of Vivendi by the Breton businessman's holding company has now become highly unlikely.

"We believe (...) that there is a very low probability (if not zero) that the Paris Court of Appeal will again find that Bolloré exercises de facto control over Vivendi," commented AlphaValue's team.

"The negative reaction in the share price therefore seems justified," added the independent research firm.

On the Paris stock exchange, Vivendi shares were stable on Friday afternoon following the Court of Cassation's decision, after having dropped nearly 5% in early afternoon trading.

The stock had already fallen by 13% on Wednesday, November 19, following reports in Le Monde that the Court of Cassation was challenging the obligation to launch a takeover bid.

For the record, the case was initiated by activist fund Ciam, which argued that Vivendi's breakup following the sales of UMG, Havas, and then Canal+ did not comply with stock market regulations and harmed minority shareholders. Ciam contended that Bolloré should have offered an exit to minority shareholders, who are now, as some observers point out, left "trapped" in a discounted investment vehicle.