By Ruth Bender
PARIS--Tensions bubbled up again Monday between Vivendi SA and a
U.S. hedge fund over what the company should do with its large cash
pile.
P. Schoenfeld Asset Management LP--which is pushing Vivendi to
boost cash returns--in its latest salvo took aim at the French
group's chairman and single largest shareholder, Vincent Bolloré,
criticizing him for boosting his stake in Vivendi at undervalued
stock prices.
"The Bolloré Group very recently doubled its stake in Vivendi to
approximately 10%...thus benefiting from Vivendi's undervaluation
and the absence of a detailed capital allocation plan," PSAM said,
adding it was "concerned about the investors' "opportunistic
purchases."
The hedge fund, which owns about 0.8% of Vivendi, again prompted
the company to increase shareholder returns and urged management to
provide more clarity on past and planned strategic decisions.
"Mr. Schoenfeld has been writing to us since 2013 urging us to
break up the group," a Vivendi spokesman said. "The latest attack
seems to be an attempt to destabilize Vivendi management."
The push from the fund controlled by Peter M. Schoenfeld comes
ahead of a general meeting April 17, when shareholders are set to
vote on the resolutions it has put on the agenda, asking that
Vivendi pay back EUR9 billion in a special dividend to
shareholders.
Vivendi has advised shareholders to vote against the
resolutions, arguing that Mr. Schoenfeld's goal is to dismantle
Vivendi. Besides asking for a higher dividend, the fund has also
argued that Vivendi could unlock value by selling some or all
Universal Music Group. PSAM said it would try to seek backing from
other shareholders between now and the meeting.
At the heart of the dispute lies uncertainty over how Vivendi
will use its multibillion euro cash pile it has accumulated from
recent asset sales.
Vivendi has dramatically slimmed down in recent years, selling
telecommunications and videogames units and sparking speculation as
to what it will do with the money. The group had net cash of EUR4.6
billion euros at the end of 2014, to which it will add nearly EUR10
billion more in the months to come, once outstanding disposals are
completed and before paying shareholder returns.
The former conglomerate now owns only two media assets: pay TV
group Canal Plus and Universal Music Group.
Mr. Bolloré--who has a reputation in France for being a savvy
investor but also tightly controlling companies he gets involved
in--has said little about his plans, besides pledging to create
more synergies between the units and building a France-based global
media group.
"By not distributing adequate cash to shareholders and providing
vague guidance about Vivendi's acquisition plans, Mr. Bolloré and
Vivendi's management board are asking investors to have blind faith
in their plan for the company's future," the hedge fund said.
Write to Ruth Bender at Ruth.Bender@wsj.com
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