Vincent Bolloré, the French financier who chairs Vivendi, is facing a challenge to his strategy for the media giant from a dissident shareholder concerned about his outsize influence at the company.
P Schoenfeld Asset Management, a US hedge fund, is preparing resolutions for Vivendi’s annual general meeting next month urging the company to take actions to improve its share price, according to three people familiar with the matter.
The emergence of a potential activist investor comes after shareholders and analysts raised questions over what Mr Bolloré intends to do with the €15bn cash pile he has amassed from selling assets to focus Vivendi around media and content.
Last month, the company said it expected to return €5.7bn in the form of buybacks and dividends to shareholders by mid-2017, which includes €1.3bn in distributions in 2014.
The deadline for submitting annual meeting resolutions is March 23, and PSAM may yet decide to hold off, particularly if other shareholders emerge with similar plans. The hedge fund, run by Peter Schoenfeld, has a little less than 1 per cent of Vivendi stock and has hired advisers in New York and Paris to plan a proxy fight after becoming disillusioned with the company’s share price performance. One resolution would request Vivendi pay a higher dividend, one of the people said.
Analysts at Liberum said this month: “Vivendi’s main attraction was the potential return of cash . . . The share buyback announcement disappointed and it does sound as though anyone waiting for further significant cash returns from Vivendi is in for the long haul. “
Analysts also criticised the Paris-listed group’s recent decision to sell its remaining 20 per cent stake in Numericable-SFR, the telecoms operator, to billionaire Patrick Drahi for just €40 a share — only about two-thirds of the share price at the time. Last week, Vivendi dismissed a report in the New York Post that US billionaire John Malone had offered to buy Universal Music, the world’s largest record label by revenues, through his Liberty Media group.
A PSAM spokesman declined to comment. The fund is only an occasional activist, concentrating mainly on other event-driven hedge fund strategies, but successes in recent years include improving the terms of the takeover of MetroPCS by T-Mobile USA.
The influence of Mr Bolloré, who has built a stake of more than 8 per cent in Vivendi over the past three years, is set to increase further: a new law passed last year by the French government grants double voting rights to investors who have held nominative shares for at least two years, unless shareholders decide otherwise in a general meeting. Vivendi is not planning to pass a resolution that would keep the principle of “one share one vote” on April 17, when it is holding its annual meeting. This would automatically boost Mr Bollore’s voting rights.
Mr Bolloré first began amassing a stake in 2012 when he sold his television channels to Vivendi’s Canal Plus in exchange for shares. By October of the same year, he had built a 5 per cent holding, becoming the group’s largest shareholder. He also won a seat on the board.
In late 2013, he began to assert his power more clearly, successfully heading off a move by then chairman Jean-Rene Fourtou to install a new chief executive. The two men buried their differences and Mr Fourtou made way for Mr Bolloré, who became Vivendi chairman last year.
Vivendi had net cash of €4.6bn at the end of 2014, not including the €7.5bn it is set to receive from the sale of GVT, a Brazilian telecoms company, which is set to close in the second quarter, and the €4bn it will get from the Numericable-SFR stake sale to Altice.