Hedge fund unhappy with slow return of funds to shareholders after massive slim-down under Bolloré.
In France, Vincent Bolloré counts as an activist investor. But not, apparently, activist enough for New York-based P. Schoenfeld Asset Management.
Bolloré is chairman of Paris-based Vivendi SA, owner of Universal Music Group, the world’s biggest record label in terms of sales, and its biggest shareholder with 8.2% of the company.
He’s also the architect of the plan it announced earlier this year to give back over $6 billion to shareholders in dividends and buybacks over the next three years.
However, as far as Schoenfeld is concerned, that’s too slow. The Financial Times reported Monday that PSAM is planning to push a rebellion against Bolloré and his chief executive Arnaud de Puyfontaine at this year’s shareholder meeting, with a view to increasing and speeding up cash returns.
Specifically that means selling Universal, leaving it with just one significant asset, the French TV and movie business Canal+.
No way, says Vivendi. The company put out a riposte to the media Monday, defending the current plan and saying that the majority of shareholders support it.
“UMG is not for sale, and constitutes, along with Groupe Canal+, a strategic pillar of a great media and content group,” Vivendi said, adding that it would of course submit any new demands from PSAM to the board for discussion.
Bolloré’s team is currently two years into a plan to slim down by selling off all manner of non-core assets (ranging from 85% of Activision Blizzard and 13% of Beats Music through to the sale of its Brazilian mobile and broadband company GVT to Spain’s Telefonica).
After selling nearly $20 billion worth of assets in the last two years, it already has almost $5 billion in net cash and it’s due to get another $8 billion when the sale of GVT goes through in spring. But the company has so far said very little about how it intends to use what’s left of the cash to strengthen the “strategic pillars” that remain.
A spokesman for PSAM wasn’t immediately to comment on what action it wants to see at Vivendi. However, some media speculated that the last straw may have been its rumored refusal to listen to an approach for UMG from John Malone’s Liberty Media Corp. group. No-one at Liberty was immediately able to comment either.
UMG has the rights to moneyspinners as diverse as Taylor Swift’s “1989” and the soundtrack from Disney’s “Frozen” and the U.K.’s favorite crooner du jour, Sam Smith. But its revenue still fell 6.7% last year after adjusting for exchange rates, due to what it called the “rapid transformation of the recorded music industry.” [Fortune]
