Top Vivendi shareholder Vincent Bollore prepares to tighten his grip

By Leila Abboud

PARIS (Reuters) - Billionaire businessman Vincent Bollore is likely to tighten his hold on French media group Vivendi when shareholders decide on Friday whether to give long-term investors double voting rights. Behind him is an influential backer: the government.

Going into Vivendi's (VIV.PA) annual meeting, Bollore is the uncontested leader of the 162-year-old conglomerate since spending 2.84 billion euros (2 billion pounds) in the last six weeks to almost triple his Vivendi stake to 14.5 percent.

Once he has double voting rights, the tycoon will be able to decide almost single-handedly what happens next to Vivendi, which over the last two years has sold off four of its six businesses and quit the field of telecoms.

The company has a war chest of about 15 billion euros and has said it wants to create an "integrated, industrial" media group and European champion by developing its Universal Music Group and pay-TV unit Canal Plus.

French activist fund PhiTrust Active Investors opposes the plan to give Vivendi's long-term shareholders double their share of votes and has submitted a resolution to maintain the principle of one share, one vote.

But it is unlikely to gain the support of the needed two-thirds of shareholders at the Friday vote, in part because France's state-backed fund, the Caisses de Depots and public investment bank BPI - which own 3.45 percent of Vivendi - will vote against it, according to people familiar with the matter who say the decision is in keeping with the state's position in favour of double voting rights.

Last year the Socialist government passed the Florange law to grants double voting rights to shareholders registered for more than two years unless two-thirds of shareholders vote against that. The state wants to retain its influence at key companies like Renault (RENA.PA) and Orange (ORAN.PA) while being able to sell down its stakes so as to raise money to reduce the national debt.

Double voting rights are already the norm at many French companies. But 11 blue-chip firms including Renault and BNP Paribas (BNPP.PA) want to keep the one share, one vote principle on the grounds that the alternative favours insiders and hurts shareholder value.

France's Economy Minister Emmanuel Macron singled out Vincent Bollore for praise last week, foreshadowing the state's position on the vote.

"The government believes in encouraging long-term shareholding so as to accompany companies in their development," said Economy Minister Emmanuel Macron.

"We will support everyone who believes in double voting rights: Vincent Bollore in his battle for Vivendi is in the same situation. He has my full support."

People following the Vivendi case say that Bollore's vote and those of the Vivendi employees that own 3.5 percent of the shares would be enough to kill the PhiTrust resolution.

As well as the government backing, Bollore can also count on U.S. activist hedge fund P. Schoenfeld Asset Management (PSAM), which despite challenging Bollore's leadership at Vivendi last month, has since said it will vote its 0.8 percent stake against the PhiTrust resolution - a decision made after Bollore agreed to pay higher dividends.

Once double voting rights are in place at Vivendi and Bollore has had his shares long enough to qualify for them, the tycoon will have close to a blocking minority at annual shareholder meetings, and will be able to do whatever he wants with the company, analysts say.

Bollore has long been adept at cultivating good relationships with those in power.

He did a favour to the state in early April by agreeing to buy video-sharing website Dailymotion for 217 million euros from state-backed telecom operator Orange, which had been looking for a buyer for years only to see the government scupper its sale to U.S. and Chinese buyers.

A person close to Bollore said the Dailymotion deal was done in part because it would create goodwill with the government and Orange, which could come in handy as the tycoon seeks to rebuild Vivendi into a media powerhouse.

(Additional reporting by Gwenaelle Barzic; Editing by Sophie Walker)