By Ruth Bender
PARIS--U.S. hedge fund P. Schoenfeld Asset Management is on a
mission to rally support from other Vivendi shareholders in its
fight with the French group to obtain a higher dividend.
PSAM Chief Executive Peter Schoenfeld came to Paris Tuesday with
one main message: Vivendi should share its war chest with
shareholders.
"The amount of money in Vivendi's coffers is irrational," said
Mr. Schoenfeld in a meeting with journalists. "There is one clear
issue: the dividend is inadequate."
PSAM, which owns around 0.8% in Vivendi according to Mr.
Schoenfeld, on Monday pressured Vivendi to use the cash pile
amassed through recent asset sales to raise shareholder returns.
The move comes as Vivendi has amassed billions in cash as it
slimmed down from a telecom-to-entertainment conglomerate to a much
smaller media-centric version.
PSAM submitted two resolutions for the group's annual meeting on
April 17 demanding Vivendi return a total of EUR9 billion ($10
billion) in the form of a special dividend, over EUR3 billion more
than the company has pledged to return to holders.
The fund said Vivendi is undervalued because of its large cash
stock and uncertainty over how the group plans to use its funds in
the future and that it will try to convince as many shareholders as
possible to support its case. PSAM, founded by Mr. Schoenfeld,
believes Vivendi could boost its share price by reducing its cash
stock through dividends as well as possibly selling off all or
parts of Universal Music Group, one Vivendi's two remaining
businesses.
Vivendi fired back at the demands, signaling that the battle
PSAM is preparing to fight could be a tough one.
"This U.S. hedge funds wants to dismantle Vivendi and take the
cash," said a Vivendi spokesman. "We won't let it happen."
Vivendi repeated that its management board is committed to
building a media and content group in the long-term with the
support of its main shareholder.
PSAM is the first shareholder to challenge Vivendi since
ChairmanVincent Bolloré took over the reins of the group. Mr.
Bolloré owns 8.2% of the company and became chairman last June, but
he has given little information about how he sees the future of
Vivendi.
In the past, PSAM, made headlines for opposing Deutsche Telekom
AG's deal terms for U.S. wireless carrier MetroPCS Communications
Inc.
With less than a month before Vivendi's annual meeting and
representing only a small amount of shareholders, analysts see
little chance for PSAM to succeed in challenging Vivendi's
chairman.
"We believe that it is highly unlikely that PSAM's approach is
successful, as Bolloré undoubtedly had plans to reinvest the EUR14
billion cash balance to further ambitions in content and in
Africa," said Conor O'Shea from Kepler Cheuvreux.
Vivendi has sold off assets that accounted for more than half of
its revenue, including videogames maker Activision Blizzard and
telecommunications companies in France and Morocco. But the group
has provided little indication of what it plans to do with its cash
and how it plans to develop the company in the future, frustrating
some shareholders.
PSAM said it has three letters to Vivendi since 2013 with
suggestions on how to improve the value of the company but hasn't
received any response or met with management, Mr. Schoenfeld
said.
"Shareholders deserve more information. If we leave them with
all this leeway, they will never seek any sort of approval for any
future plans with shareholders," Mr. Schoenfeld said. He said the
big cash pile could tempt management to spend it unwisely.
Asked what PSAM plans to do if it succeeds, Mr. Schoenfeld said
the fund would stay a shareholder in Vivendi. If the fund fails to
obtain the change it wants, it will have to consider what to do
with its investment going forward, Mr. Schoenfeld said.
Several other Vivendi shareholders, including Société Générale
branch Lyxor Asset Management, Amundi Asset Management and Natixis
Asset Management, declined to comment on PSAM's resolutions.
Write to Ruth Bender at Ruth.Bender@wsj.com
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