The activist hedge fund, Bluebell Capital, is pursuing their success propaganda In Danone, targeting another large French corporation, Vivendi Media Group և, its powerful controlling shareholder, billionaire Vincent Bollen.
The London-based boutique fund, which has assets of just € 70 million, sent two letters to Vivendi in May asking for details. upcoming plan to use its largest asset, Universal Music Group, by distributing 60% of its share capital to joint stock companies.
Vivendi proposes UMG split, which will be put to a shareholder vote on June 22 as a way to open up value, given the soaring ratings enjoyed by music companies Raising streaming services.
The French group, which owns 80 percent of UMG, valued the business at € 33 billion. The remaining 20% belongs to a consortium Led by Chinese group Tencent.
In a May 21 letter, Blaubel said that while the spin-off was a good idea in principle, the method chosen for the Vivendi deal was “not optimal.” The structure, known as subdivision dividends, will allow minority shareholders to suffer significant tax bills.
To fix the problem, Bluebell asked Vivendi to pay shareholders an additional special cash dividend of 2.80 euros per share, or about 3.3 billion euros.
“We strongly support the separation of UMG from other businesses. “It’s the right thing to do. Investors have long sought to lower the discount for Vivendi Holding,” said Marco Tarrico, co-founder of Bluebell.
“What we have reservations about is how they make the separation, making a natural dividend. This is not optimal for all potential shareholders except Vincent Bolloré and Groupe Bolloré. ”
Taricco refused to give Bluebell a stake in Vivendi.
Vincent All effectively controls Vivendi, as his holding company has a 27% stake 29 29.73%, which is below the legal threshold, which will require a full buy offer.
At the time of UMG’s proposed split, the billionaire was “likely” to face tax problems similar to those of minority shareholders, Taricco said, adding that UMG’s resource shareholder would remain in the new company with a 19% stake.
The fund also expressed concern about how Vivendi had already transferred UMG assets to the Dutch start-up, even before securing shareholder approval for the deal. “Vivendi shareholders have been effectively introduced to a done“, – is written in the letter.
At this stage, Bluebell stopped offering its partner shareholders to vote against UMG’s proposed separation at its forthcoming annual meeting, Taricco said. “We have provided them with a way to admit that they did not make the deal properly,” he said, referring to the idea of paying a special dividend.
Vivend declined to comment on whether the group would be open to such a payment, but defended the deal structure as “the best option”.
“We listen to all our shareholders and discuss all the different proposals,” Vivendi said.
Universal Music Group, home to artists such as Taylor Swift and Lady Gaga, has boosted much of Vivendi in recent years.
If the operation were completed, the remaining Vivendi businesses would be much smaller, with a focus on France. These include the pay-TV operator Canal Plus; communication agency Havas; mobile game publisher Gameloft; և Editor of the book Edith.
In 2019, UMG accounted for 45% of Vivendi € 15.9 billion in sales and 73% of € 1.5 billion in operating profit.