By Ruth Bender
PARIS--French billionaire investor Vincent Bolloré boosted his
stake in Vivendi SA for the third time in a month as a public
quarrel with its shareholder P. Schoenfeld Asset Management LP
heats up.
Groupe Bolloré, the conglomerate controlled by Mr. Bolloré, said
Thursday it has increased its stake in Vivendi to 12.01% from 10.2%
after spending another EUR568 million ($615 million) to buy more
shares.
The move comes as Vivendi is under fire from PSAM, a U.S. hedge
fund that wants the company to use funds from recent asset sales to
boost shareholder returns. PSAM is trying to get backing from other
shareholders for two resolutions it has proposed for Vivendi's
general meeting later this month that would require Vivendi to pay
shareholders a total of EUR9 billion.
Vivendi has been fighting back. The French owner of pay TV group
Canal Plus and Universal Music Group argues that the hedge fund,
which owns 0.8% in Vivendi, wants to dismantle the company and is
urging shareholders not to vote for the resolutions.
In the spotlight is the multi-billion euro cash pile that
Vivendi has amassed after selling telecom and video game assets.
Vivendi has dramatically slimmed down in recent years, leaving
investors scratching their heads over what its new chairman plans
to do with the cash to develop Vivendi into a European media group.
But Mr. Bolloré has said little about his plans, sparking some
criticism from investors.
Now Mr. Bolloré, who took over the chairmanship of Vivendi last
June and is also the company's largest individual shareholder, is
gearing up for what could be an intense general meeting in Paris on
April 17. He has more than doubled his holding in Vivendi over the
past month.
The French investor will be prompted to reply to the U.S. fund,
controlled by Peter M. Schoenfeld, at the general meeting. PSAM has
criticized Vivendi for not providing enough clarity on its strategy
and said its chairman is benefiting from undervalued stock prices
to boost its holding.
The fund has also argued that Vivendi could boost its share
price by selling parts or all of Universal Music Group but has
refuted Vivendi's claims that it was seeking to dismantle the
company.
Vivendi in the meantime gained the backing from its employees in
the fight with PSAM after warning that the fund could severely
damage Vivendi with its push to "dismantle" the group.
"We are confident that our group can become an international
player in media and content generating strong job creation through
a long-term strategy," noted Paulo Cardoso, who represents Vivendi
employees on the supervisory board, in a letter this week. "It is
our duty to reject your proposal which is essentially nothing more
than a holdup."
Mr. Schoenfeld on Thursday said it was too early to tell how
much backing from shareholders he would get. "Let's say we're
optimistic," Mr. Schoenfeld told France's Les Echos newspaper. "We
don't understand why our initiative is stirring such a controversy.
What we are proposing to Vivendi is a win-win deal."
Write to Ruth Bender at Ruth.Bender@wsj.com
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