Vivendi has gained the support of its shareholders to strengthen its largest Universal Music Group business in a separate company, which will leave the group controlled by billionaire Vincent Bolloré focused on the media in Europe.
Tuesday’s vote paves the way for Vivendi to distribute 60 percent of the world’s largest music label to its shareholders in what is known as in-kind distribution. The label behind artists such as Taylor Swift and Billie Eilish will become an independent company valued at just under € 35 billion, with a list scheduled for September on Euronext in Amsterdam.
Following the moves, a consortium controlled by China’s Tencent will own 20 percent of the new independent UMG, Bolloré’s personal holding company owns 18 percent and Vivendi owns 10 percent.
A white-collar control company also controlled by billionaire Bill Ackman of special funds I bought it recently a 10 per cent stake in UMG and will distribute it to its shareholders after the listing.
The vote is a big win for corporate and industrial raider Bolloré who first went to Vivendi in 2012 when he sold the French group two small television channels in exchange for shares.
He gradually developed his stake to take effective control of the group, becoming chairman of the board in 2014. The businessman, whose Bolloré Group directs transport and logistics in Africa, chaired a series of asset sales that have lifted Vivendi out of video games and telecommunications. with a large portion of the revenues returned to the shareholders, including himself.
In 2018 he passed the role of Vivendi chair to son Yannick Bolloré, but remains a driving force behind the group. The Bolloré holding holds 27 per cent of Vivendi’s shares and controls 29.73 per cent of the voting rights.
Many active investors like Bluebell Capital and Third Point had taken the bet in Vivendi before Tuesday’s vote, with seniors criticizing the terms of the UMG separation. However, both had stopped calling stock to block it.
Activists have faced an upward battle to exploit the move or to change its terms since Vivendi only needed a simple majority of shareholders to approve it.
Vivendi also won a separate vote on a resolution, which activists were opposed to, which gives the group the option to buy back half of its share capital for a maximum price of € 29 per share after the UMG agreement.
Proxy consulting companies ISS and Glass Lewis had recommended voting against the resolution, arguing that it risked not being in the interests of minority shareholders. Bluebell Capital had warned that Bolloré could use this tool to increase its stake in Vivendi without making a tender offer as will usually be required by French securities law when a shareholder holds more than 30 percent of a society.
Following the separation of UMG, Vivendi’s remaining activities will include pay-TV operator Canal Plus, advertising agency Havas and book publisher Editis. It also has a 29% stake in the French media and the Lagardère retail group, and a 24% stake in Telecom Italia.