24th March 2012: European Commission Antitrust Investigation on EMI

Vivendi SA (Universal Music Group)

I’m working on an academic journal article about Terra Firma‘s unsuccessful private equity acquisition of EMI. Terra Firma defaulted to Citigroup, which agreed to sell EMI’s record labels in November 2011 to Universal Music Group (Vivendi SA) and EMI’s publishing to a Sony-led consortium. Now, the European Commission will investigate Universal’s acquisition for antitrust implications, given the planned market size of the combined group. Vivendi SA’s shares traded sideways in a choppy market on Friday, 23rd March 2012, possibly in relation to the antitrust announcement and the possibility of regulatory arbitrage on the Universal-EMI deal.

J6M Returns

At the nadir of the 2000-01 dotcom crash I worked for an Internet news portal that a high-profile US interactive consulting firm had acquired. As the stock price dramatically plummeted the firm’s employees apparently left irate messages on the CEO’s mobile phone and debated the merits of an (in)famous investor conference call. After a deathwatch period the ex-CEO formed a holding company, hit the university lecture circuit, launched a new company, and is now an inhouse entrepreneur at a venture capital fund. The company was Razorfish, the CEO/entrepreneur is Jeff Dachis, who now works with Austin Ventures.

Jo Johnson’s Financial Times interview with Jean-Marie Messier (aka J6M) the fallen ex-CEO of French entertainment conglomerate Vivendi SA (Google Finance stock price) prompted me to follow Dachis’s Twitter page. Dachis and J6M offer many lessons on how smart executives can make mistakes, survive the deathwatch period, and fire back. Both faced learning/experience curves as young, ambitious CEOs and grew their global footprint through acquisitions of smaller firms. Both gambled on bold Web 1.0 visions of digital ecosystems in which the acquisitions promised deal synergies. When the gambles failed they became media targets for value destruction which made the deal synergies a mirage: Johnson and Le Monde journalist Martine Orange pilloried J6M in their book The Man Who Tried to Buy the World (Portfolio, New York, 2003).  Just over five years later, J6M is frank with his former nemesis on his survival instinct: “The real motivation is to be alive, to restart, to kick yourself and stand up again.”

Johnson believes many of J6M’s decisions are gambits to resurrect his reputation on his own terms. He’s reached out to financial media journalists who took him to task for Vivendi’s hypergrowth. He’s a longtime confidante and advisor to French president Niolas Sarkozy. He’s joined George Soros, Paul Krugman, Robert Shiller and many others in writing a book on the global financial crisis. But perhaps J6M’s smartest move like Dachis was to leverage his core skillset to create value, in a more favourable setting without the pressure of being a public company CEO. J6M founded Messier Partners in 2002 as a 20-person investment advisory boutique with offices in New York, Paris and London that provides cross-border M&A, divestitures and capital raising services (Forbes & International Herald Tribune coverage). Like many boutiques it leverages Messier’s name, personal network and a cadre of young analysts whilst keeping a low profile: when I checked, the firm doesn’t have a current public website for its Internet domain name and its Internet Archive cache returns errors. You’ll have to settle for the boutique’s LinkedIn page, BusinessWeek profile and Jobs-Salary.com data.