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. Last Updated: 07/27/2016

Vivendi Chief Facing Dismissal

PARIS/LONDON -- The future of Vivendi Universal's unpopular boss Jean-Marie Messier was thrown into serious doubt on Monday amid growing evidence his supporters had turned against him, sending the media giant's shares higher.

Vivendi shares rallied 10 percent, fuelled by speculation that Messier's former board allies had met in secret on Sunday and decided their leader must step down, urged on by hardline Messier critic and French businessman Claude Bebear.

French newspaper Liberation reported that the six European directors had already asked for Messier's resignation and would publish a statement on Monday demanding he step down if they did not receive it. They have proposed Jean-Rene Fourtou, vice chairman of drugmaker Aventis, as his replacement.

Only last week, the same board members had defended Messier from calls to resign from U.S. board members. Now the stormy reign of the chief executive who built an entertainment empire spanning music, film and television, looks bleaker than ever.

"Without a doubt investors would welcome Messier's exit. He's made so many mistakes and ultimately the share price has fallen 60 percent this year. If someone else could bring much needed direction that would be a good thing," said David Ferguson, media analyst at Barclays Private Clients in London.

Liberation said Bebear, the influential supervisory board chairman of insurer Axa SA, had been plotting behind the scenes to evict Messier, fearful that his unpopularity was damaging the reputation of Paris as a financial center.

Bebear has joined forces with Jerome Monod, adviser to French President Jacques Chirac, to prepare a new solution for the company and has proposed his close ally Fourtou take the reins of the company whose interests include pop group U2 and assets such as Universal Studios and Canal Plus pay television.

Both Aventis and Vivendi declined to comment.

Vivendi shares, which have fallen more than 60 percent so far this year, were 10.2 percent up at 24.11 euros in early afternoon trading on the Paris exchange. The rise added to strong gains last Friday as the markets buzzed with talk of unusually large share purchases with 10 percent of the stock traded in five days.

Messier, 45, has been blamed for Vivendi's recent woes after transforming the Paris-based group from a gray French water company into one of the world's biggest media firms.

After a manic acquisition spree, Messier left Vivendi struggling with a huge debt pile, a sliding share price and France's biggest loss in corporate history. A series of fumbled announcements further dented investor confidence.

U.S. board members have been calling for Messier's exit for some months. Supporters of Vivendi's biggest shareholder, the Bronfman family, again demanded his resignation last Tuesday but he clung on with the support of his French allies.

But that was when there was no obvious candidate to replace Messier. With a candidate now in sight, Messier's French allies would be more willing to part ways with the chief executive.

Sources familiar with the situation said Friday there were signs that investors opposed to Messier's handling of the company were buying up shares to help squeeze him out.

Questions had already arisen Friday over the influential role played behind the scenes by Bebear, after a source said he had held talks with rebel Vivendi boardmember Samuel Minzberg, who represents part of the Bronfman family.

The source said Bebear appeared to be an influence on last week's heavy trading, whether as instigator or friendly observer, without necessarily having bought any shares himself.

Vivendi-watchers said buying shares could be one way of strengthening the influence of disgruntled American investors.

Liberation said Messier's former French supporters Alcatel chairman Serge Tchuruk and former Societe Generale chief Marc Vienot, long-time supporters of Messier, had finally changed allegiance.

French board members were placed under increasing pressure by reports that the Bronfmans were thinking of calling a extraordinary meeting of shareholders to try to oust Messier.