Vivendi likely to launch a tender offer at EUR24.1 Vivendi has announced that it has accepted Amber Capital''s sale proposal for the French group to buy its stake in Lagardere at EUR24.1 per share. The sale is conditional upon the approval of the European Commission and the CSA, the French audiovisual authority. Vivendi expects the deal to close by December 15th, 2022. On the back of this transaction, and assuming it is validated by both the EC and CSA, Vivendi will own 45.1% of Lagardere''s capital and 36.1% of its voting rights. As Vivendi would then cross the 30% regulatory threshold, the group has announced that it would launch a public tender offer for the remaining 55% share in Lagardere. The price of the tender offer has been set at EUR24.1. A merger makes sense As discussed in LAGARDERE, VIVENDI: A twist in the tale? we note that cost synergies in trade publishing mergers are significant, and also believe that the regulatory background to the merger has improved since 2003 when the European Commission prevented Lagardere from buying most of the trade and school publishing assets now owned by Vivendi. We note that Lagardere recently commented on Vivendi''s announcement of the stake purchase by saying that ''it is delighted with the investment project that Vivendi wishes to carry out'' and that ''this project demonstrates Vivendi''s confidence in the relevance of Lagardere''s strategic model based on the complementarity of its activities and its operational efficiency''. Upgrading to Neutral Lagardere''s share price has jumped on the back of Vivendi''s announcement. We expect this deal, rather than ongoing operating trends, to be the main driver of the shares in the medium term. We upgrade Lagardere to = and raise our TP to EUR24.1 based on the technical elements of the deal. Our forecasts are unchanged.