By Sam Schechner And Ruth Bender
PARIS-- Vivendi SA said it will propose an additional dividend
of EUR2 a share, boosting its cash return to shareholders as part
of an agreement to quell a public spat with a minority shareholder
ahead of the media conglomerate's annual meeting.
Vivendi and U.S. hedge fund P. Schoenfeld Asset Management LP
said Wednesday that they have in recent days struck a deal to end
their public feud, with Vivendi promising new dividends that will
push Vivendi's overall cash return to shareholders to EUR6.75
billion ($7.3 billion).
In return, PSAM has agreed to withdraw two resolutions the
company had proposed to force Vivendi to pay out EUR9 billion to
shareholders, the two companies said.
The agreement puts an end to a battle that broke out last month,
over what Vivendi should do with the roughly EUR10 billion it will
have on its balance sheet when it completes a recent spate of
recent asset sales. In the last two years, 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--leaving it focused on media.
The French group's chairman and single largest shareholder,
Vincent 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.
In recent weeks, PSAM has said that Vivendi lacked a strategy,
and should instead return cash to shareholders. On Wednesday,
however, PSAM said it endorsed the company's growth strategy when
combined with the new dividends.
"Mr. Bolloré has demonstrated his sensitivity and willingness to
respond to shareholder concerns," the firm said in a statement.
As part of the deal Vivendi will propose the new dividend in a
shareholder meeting after it completes all of its pending sales,
including its telecommunications company in Brazil and its
remaining stake in French telecommunications operator SFR.
If approved, it will be paid in two tranches, one in the fourth
quarter of 2015 and the other in the first quarter of 2016.
Vivendi said it might consider returning more money to
shareholders if its acquisition strategy requires less cash than
anticipated over the next two years.
The truce after the three-week-long public quarrel that included
a series of threats and counterthreats comes just a week before
Vivendi's management was set to be challenged to respond to
criticism from the U.S. fund in front of other shareholders at a
general meeting in Paris.
The fund, run by Peter Schoenfeld, had argued that Vivendi is
undervalued because of its large stockpile of cash and uncertainty
over how the group plans to use its funds in the future. Mr.
Schoenfeld said he would try to persuade as many shareholders as
possible to support his case before the vote in April. It was
unclear if he managed to rally much support.
Mr. Bolloré meanwhile has been gearing up for the meeting by
boosting his stake in Vivendi from roughly 5% just before the fight
became public to around 12% he controls today.
Vivendi, which owns French pay TV Canal Plus group and Universal
Music Group, Wednesday also entered into exclusive talks with
French telecommunications company Orange SA over a deal to buy 80%
of video-streaming site Dailymotion. The company said the deal is a
first step in its ambition to create a big global content
company.
With the quarrel with PSAM resolved, Vivendi faces only one
issue to resolve at its general meeting next month.
Separate to PSAM's demands, a group of minority holders
submitted a resolution asking that Vivendi not apply a new French
law that gives double voting rights to investors that have held
shares for at least two years, a move designed to encourage
long-term investments. Vivendi has called on shareholders to vote
against the resolution.
Write to Sam Schechner at sam.schechner@wsj.com and Ruth Bender
at Ruth.Bender@wsj.com
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