Vivendi has won shareholder support to split its largest business, Universal Music Group, into another company. This will allow the group to be managed by billionaire Vincent Bolloré, who focuses on European legacy media.
The vote on Tuesday paves the way for Vivendi to distribute 60% of the world’s largest music labels to shareholders in a way known as physical distribution. The label behind artists such as Taylor Swift and Billie Eilish has recently become an independent company worth € 35 billion and will be listed on Euronext in Amsterdam in September.
After the move, a consortium managed by Tencent in China will own 20% of the newly independent UMG, Bolloré’s private holding company will own 18%, and Vivendi will own 10%.
There is also a blank check company managed by hedge fund billionaire Bill Ackman Recently purchased It is a 10% stake in UMG and will be distributed to shareholders after listing.
This vote is a big win for corporate assailant and businessman Bolloré, who first joined Vivendi in 2012 when he sold two small TV channels in exchange for shares to a French group.
After that, he gradually increased his shares to effectively manage the group and became chairman of the board of directors in 2014. The Borole Group’s transportation and logistics businessmen in Africa presided over a series of asset sales that excluded Vivendi from video games and communications. Much of the proceeds go back to shareholders, including themselves.
In 2018 he took over the role of chairman of Vivendi to his son Yannick Borole, but continues to be the driving force of the group. Bolloré’s holding company owns a 27% stake in Vivendi and controls 29.73% of its voting rights.
Some activist investors like Bluebell Capital And Third point Investing in Vivendi prior to Tuesday’s vote, the former criticized the terms of UMG separation. However, neither has asked shareholders to stop it.
Vivendi needed only a simple majority of shareholders to approve it, so activists faced a difficult battle to block the move or change its terms.
Vivendi also won another vote on a resolution opposed by activists. This will allow the group to buy back up to half of its share capital for up to € 29 per share after trading UMG.
Deputy advisory firms ISS and Glass Lewis have recommended voting against the resolution, arguing that there is a risk that it will not benefit minority shareholders. Bluebell Capital uses this tool to make a tender offer to Vivendi without making a tender offer as would normally be required by French securities law if shareholders own more than 30% of the company. Warned that we could increase our investment.
After the separation of UMG, Vivendi’s remaining businesses will include pay-TV operator Canal Plus, advertising agency Havas, and book publisher Editis. It also holds a 29% stake in the French media and retail group Lagardère and a 24% stake in Telecom Italia.
Vivendi Investors Support Universal Music Plans with Bolloré’s Victory
Source link Vivendi Investors Support Universal Music Plans with Bolloré’s Victory