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Vivendi has won the support of its shareholders to consolidate its largest business Universal Music Group into an independent company, which will leave the group controlled by billionaire Vincent Bolloré focused on inherited media in Europe.
Tuesday’s vote paves the way for Vivendi to hand over 60% of the world’s largest music label to its shareholders in what is known as a distribution in kind. The label of artists such as Taylor Swift and Billie Eilish will become an independent company recently valued at 35 billion euros, with a list scheduled for September at the Euronext in Amsterdam.
Following the moves, a consortium controlled by China’s Tencent will own 20% of the newly independent UMG, Bolloré’s personal holding company will own 18% and Vivendi 10%.
A blank check company also controlled by billionaire hedge fund Bill Ackman recently purchased a 10% stake in UMG and will distribute it to its shareholders after listing.
The vote is a big win for corporate and industrial Bolloré, who first joined Vivendi in 2012 when he sold two small television channels to the French group in exchange for shares.
He then increased his stake to take effective control of the group, becoming chairman of the board in 2014. The businessman, whose Bolloré group manages transportation and logistics in Africa, chaired a series of asset sales that took Vivendi out of video games and telecommunications. with much of the revenue returned to shareholders, including himself.
In 2018 she passed the role of President Vivendi to her son Yannick Bolloré, but she remains an engine of the group. The Bolloré holding company owns 27% of Vivendi’s shares and controls 29.73% of the voting rights.
Several activist investors such as Bluebell Capital i Third point had participated in Vivendi before Tuesday’s vote, and the former criticized the terms of the UMG separation. However, both had stopped asking shareholders to block him.
Activists faced a tough battle to frustrate the move or change its terms, as Vivendi only needed a simple majority of shareholders to approve it.
Vivendi also won a separate vote on a resolution, which activists had opposed, giving the group the option to buy up to half of its share capital for a maximum price of € 29 per share after the UMG agreement.
The ISS and Glass Lewis delegation advisory firms had recommended voting against the resolution, arguing that it ran the risk of not being in the interest of minority shareholders. Bluebell Capital had warned that Bolloré could use this tool to increase its stake in Vivendi without making a tender offer, as would normally be required by French securities law when a shareholder owns more than 30% of a company.
Following the separation of UMG, Vivendi’s remaining businesses will include pay-TV operator Canal Plus, advertising agency Havas and book publisher Editis. It also owns a 29% stake in the media and French retail group Lagardère and a 24% stake in Telecom Italia.
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