Third Point increases its stake in Vivendi as universal suffrage approaches

Activist investor Third Point has built a stake in Vivendi, the media group controlled by French billionaire Vincent Bolloré, as a shareholder vote on its plan to roll out Universal Music Group.

The New York-based hedge fund led by Daniel Loeb had built a “substantial” position in the French media conglomerate in recent months, a source familiar with the fund said.

Vivendi said he had no information about participation at this stage.

Third Point declined to comment on how it planned to use its stake. His investment comes when Vivendi enters into a deal to sell a stake in Universal Music to Bill Ackman’s blank check company. If Loeb opposes the deal, he would face two titans from the investment world.

Pershing Square Tontine Holdings, a special purpose acquisition company created by Ackman, he said earlier this month who was in talks to buy a 10% stake in Universal Music, the record label behind artists such as Lady Gaga and Taylor Swift, for about $ 4.1 million.

The deal would value Universal for more than $ 40 billion. However, unlike the traditional Space mergers, would not make the group public. Vivendi, on the other hand, plans to disseminate Universal Music and distribute 60% of the group’s share capital to investors. Universal would be listed on Euronext Amsterdam in the third quarter of 2021.

Vivendi shareholders will vote on the Universal Music distribution on June 22nd. Some investors, including activist hedge fund Bluebell, have already expressed concern about the proposal.

Marco Taricco, co-founder of Bluebell, which owns a small stake in Vivendi, said at the time that the valuation “seems disappointing”. Bluebell sent two letters to Vivendi in May about the separation of the group’s main assets.

The London-based fund said the derivation was a good idea in principle, but questioned the structure, known as a dividend in kind, which it said would affect minority shareholders with significant tax bills. Bluebell has asked Vivendi to pay shareholders an additional extraordinary cash dividend of about 3.3 million euros.

According to Bloomberg, Artisan Partners, another Vivendi shareholder, has opposed the proposed deal with Ackman, echoing Bluebell’s concerns about the tax bill arising from the distribution of shares.

If shareholders reject the distribution in kind at next week’s meeting, it could jeopardize Ackman’s plans to invest in Universal Music.

Vivendi only needs a simple 50% majority to approve the Universal separation. Bolloré, whose holding company has a 27% stake in Vivendi, effectively controls the group with 29.73% of the voting rights.