Vivendi investors return to Universal Music plan in victory for Bolloré

Vivendi won the support of its shareholders to turn its largest subsidiary Universal Music Group into a separate company, which would leave the group under the control of billionaire Vincent Bolloré focused on old media in Europe.

Tuesday’s vote paves the way for Vivendi to hand over 60 percent of the world’s largest music label to its shareholders in what is known as in-kind distribution. The brand behind artists like Taylor Swift and Billie Eilish will become a recently self-contained company worth €35 billion, due to be listed in September on Euronext in Amsterdam.

After the moves, the Chinese company Tencent-controlled consortium will own 20 percent of the newly independent UMG, Bolloré’s personal holding company will own 18 percent and Vivendi 10 percent.

Blank Check Inc. is also run by billionaire hedge fund Bill Ackman recently bought 10 percent stake in UMG and will distribute it to its shareholders after the listing.

The vote is a big win for adventurer and industrialist Bolloré, who first entered Vivendi in 2012 when he sold two small television channels to the French group in exchange for shares.

He then gradually built up his stake to take effective control of the group, becoming chairman in 2014. The entrepreneur, whose Bolloré Group operates transportation and logistics in Africa, headed a series of asset sales that took Vivendi out of video games and communications. With much of the proceeds returned to shareholders, including himself.

The vote is a big win for businessman and industrialist Vincent Bollory, who first joined Vivendi in 2012 © Zakaria Abdelkafi / AFP / Getty Images

In 2018, he passed the role of the Vivendi chair to his son Yannick Bolloré, but he remains a driving force in the group. Bolloré Holdings owns 27 percent of Vivendi’s shares, and controls 29.73 percent of the voting rights.

Many active investors like Bluebell Capital And the third point He had taken stakes in Vivendi ahead of Tuesday’s vote, in which the former criticized the terms of UMG’s separation. However, both stopped short of calling on shareholders to ban it.

Activists faced an uphill battle to thwart the move or amend its terms because Vivendi only needed a simple majority of shareholders to approve it.

Vivendi also won a separate vote on a resolution, contested by activists, that gives the group an option to buy back up to half of its capital for a maximum price of €29 per share after the UMG deal.

The two agency consulting firms ISS and Glass Lewis have recommended voting against the resolution, arguing that it risks not being in the best interest of minority shareholders. Bluebell Capital warned that Bolloré could use this tool to increase his stake in Vivendi without submitting a tender offer as is normally required under French securities law when a shareholder owns more than 30 per cent of the company.

After the UMG chapter, Vivendi’s remaining businesses will include pay-TV operator Canal Plus, advertising agency Havas and book publisher Editis. It also owns a 29 percent stake in French media and retail group Lagardère, and 24 percent in Telecom Italia.

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