Vivendi strikes deal with rebel investor to secure UMG future

The management board of Vivendi has reached an agreement with its ‘activist’ investor PSAM over dividends to shareholders – a move which should secure UMG’s future as a fully-owned subsidiary.

P. Schoenfeld Asset Management (PSAM) previously demanded that the French conglomerate pay its investors a special dividend from its current cash pile, which runs into multiple billions of Euros.

As a side demand – and a move to cause more disruption at Vivendi – PSAM has recommended that the group spin out Universal into an ‘independent’ entity on the stock market.

That now doesn’t look like a possibility, after the boss of PSAM, Peter Schoenfeld, shook on a peacekeeping deal with Vivendi top brass yesterday that will see Vivendi committed to returning €6.75bn to shareholders.

Vivendi said in a statement: “PSAM said it understood and accepted Vivendi’s strategy aimed at setting up a large group focused on media and contents, by building on UMG and Canal+ assets. It acknowledged that Vivendi’s management team and, in particular, its Chairman of the Supervisory Board, had achieved significant results in terms of creating value”

For its part, Vivendi’s Management Board agreed that payouts to shareholders could be accelerated “despite the complexities that may result for the redeployment of Vivendi in media and contents”.

Further to the completion of the divestments of GVT and the residual stake held in Numericable-SFR, Vivendi agreed to convene a General Shareholders’ Meeting with a view to proposing to shareholders the additional distribution of €2 per share, with €1 to be paid out in Q4 2015 and €1 in Q1 2016.

These payouts will be be added to Vivendi’s existing commitment to pay out a €1 ordinary dividend per share, in both financial years 2016 and 2017.

Added the company: “The Management Board and the Supervisory Board confirm their commitment to this €1 dividend. In total Vivendi is committing to return €6.75 billion (€5.00 per share) to shareholders. Furthermore, Vivendi will review the possibility to propose additional distributions if its acquisition strategy were to require less cash than anticipated over the next two years.”

Arnaud de Puyfontaine, the Chairman of the Management Board, stated that “these distributions demonstrate our willingness to reach a consensus with some of our minority shareholders, even if it may result in reduced flexibility for Vivendi in the implementation of its strategic ambition to build a major media and content group.”

Vincent Bolloré, the Chairman of Vivendi’s Supervisory Board and the group’s biggest shareholder with a 12% stake, stated that “he fully supported the decisions taken by the Management Board that have been made possible only by the excellent work carried out with respect to asset divestments”.

Lastly, he said that “as a shareholder, he would vote in favor of all the draft resolutions submitted by the Management Board to the General Shareholders’ Meeting”.

PSAM informed Vivendi that it would withdraw the draft resolutions that it has presented to the Shareholders’ Meeting to be held on 17 April 2015.

PSAM and Vivendi agreed to carry out a review of the situation by 2017.Music Business Worldwide

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