Vivendi shareholders will vote on Monday on a large buyback plan that might permit Vincent Bolloré’s household holding firm to take higher management of the media conglomerate, angering some traders.
A company governance specialist and a outstanding activist investor have urged shareholders to vote in opposition to a decision authorising a 25 per cent discount within the firm’s share capital, a proposal that Vivendi unveiled in February alongside its full-year outcomes.
The Bolloré Group, the industrialist’s household holding firm, already holds 28.51 per cent of the voting rights in Vivendi, whose belongings embrace Common Music Group, promoting firm Havas, and video video games writer Gameloft.
“It’s not within the pursuits of minority shareholders to authorise such a transaction,” stated Loïc Dessaint, chief govt officer of Proxinvest, which offers proxy voting analysis for traders. “The issue is that it’s a manner for Bolloré Group to manage the corporate with out launching a full takeover. The techniques of the Bolloré Group is at all times to attempt to take full management with out paying the value.”
Vivendi didn’t reply to a request for remark.
Decreasing the general variety of excellent shares in Vivendi would imply that the Bolloré Group passively crossed the edge of 30 per cent of the voting rights, which usually signifies that an organization should make a compulsory takeover bid. Nonetheless the Bolloré Group might ask the French markets regulator, the AMF, to waive this obligation. It was granted an identical waiver at Havas in 2012, when the AMF allowed the Bolloré Group to cross the 30 per cent threshold with out making a full bid.
“That is traditional Bolloré,” stated Peter Schoenfeld, an activist investor who holds shares by way of his P. Schoenfeld Asset Administration car and has beforehand clashed with Mr Bolloré. “Each time he makes use of the identical playbook. He might quickly personal greater than 30 per cent of Vivendi with out paying a premium.”
Mr Schoenfeld added: “If the Vivendi board desires to distribute money they need to achieve this by way of dividends and shield the rights of the present majority. Shareholders ought to vote down the general public provide except Bolloré Group agrees to tender together with the general public.”
Thursday, 14 February, 2019
Nonetheless, the decision proposes a most worth for a buyback of €25 per share. On Friday Vivendi’s share worth closed at €26.28. The buyback proposal boosted Vivendi’s share worth when it was introduced in February. “A share buyback at as much as €25 is a intelligent manner of making a glass flooring on Vivendi’s share worth,” stated Tom Singlehurst, an analyst at Citi.
At Vivendi’s annual basic assembly on Monday traders will even be requested to vote for the appointment of Cyrille Bolloré to interchange this father, Vincent Bolloré, on the group’s supervisory board. This may mark the most recent step in succession planning by the elder Mr Bolloré. At Vivendi’s AGM final yr he stepped down as its chairman and was changed as chairman by one other of his sons, Yannick Bolloré. A month earlier the elder Mr Bolloré was positioned below formal investigation associated to the alleged bribery of overseas officers in Africa. He has denied any wrongdoing.
In March, 33-year-old Cyrille Bolloré was named chief govt and chairman of the Bolloré Group. Proxinvest is recommending to traders that they oppose the appointment of Cyrille Bolloré to Vivendi’s supervisory board, citing issues about board independence and his time commitments.
Vivendi’s AGM on Monday comes because the group is getting ready to promote a stake in Common, the corporate’s principal revenue engine, which banks are valuing as much as $42bn. Citi’s Mr Singlehurst stated: “Company governance issues have moved into the background as a result of proper now the pursuits of the Bolloré household shareholders in Vivendi are absolutely aligned with the non-Bolloré household shareholders: it’s all about maximising the worth of the UMG stake sale.” He added: “However I’m sceptical concerning the valuation of UMG and the way lengthy these shareholder pursuits can be aligned.”