Vivendi has won the support of its shareholders to hive off its largest business Universal Music Group into a separate company, which will leave the group controlled by billionaire Vincent Bolloré focused on legacy media in Europe.
The vote on Tuesday paves the way for Vivendi to hand out 60 per cent of the world’s biggest music label to its shareholders in what is known as a distribution in kind. The label behind artists such as Taylor Swift and Billie Eilish will become a standalone company recently valued at €35bn, with a listing planned for September on the Euronext in Amsterdam.
After the moves, a consortium controlled by China’s Tencent will own 20 per cent of the newly independent UMG, Bolloré’s personal holding company will own 18 per cent and Vivendi 10 per cent.
A blank-cheque company controlled by hedge fund billionaire Bill Ackman also recently bought a 10 per cent stake in UMG and will distribute it to its shareholders after the listing.
The vote is a big win for corporate raider and industrialist Bolloré who first got into Vivendi in 2012 when he sold the French group two small television channels in exchange for shares.
He then gradually built up his stake to take effective control over the group, becoming board chair in 2014. The businessman, whose Bolloré Group runs transport and logistics in Africa, presided over a series of asset sales that took Vivendi out of video games and telecoms with much of the proceeds being returned to shareholders, including himself.
In 2018 he passed the Vivendi chair role to his son Yannick Bolloré, but remains a driving force at the group. Bolloré’s holding company owns 27 per cent of Vivendi shares, and controls 29.73 per cent of the voting rights.
Several activist investors such as Bluebell Capital and Third Point had taken stakes in Vivendi ahead of Tuesday’s vote, with the former criticising the terms of the UMG separation. However, both had stopped short of calling for shareholders to block it.
The activists faced an uphill battle to thwart the move or to modify its terms since Vivendi only needed a simple majority of shareholders to approve it.
Vivendi also won a separate vote on a resolution, which the activists had opposed, that gives the group an option to buy back up to half of its share capital for a maximum price of €29 per share after the UMG deal.
Proxy advisory firms ISS and Glass Lewis had recommended voting against the resolution, arguing that it risked not being in the interests of minority shareholders. Bluebell Capital had warned that Bolloré could use this tool to increase his stake in Vivendi without making a tender offer as would usually be required under French securities law when a shareholder owns more than 30 per cent of a company.
After the separation of UMG, Vivendi’s remaining businesses will include pay-television operator Canal Plus, advertising agency Havas, and book publisher Editis. It also owns a 29 per cent stake in French media and retail group Lagardère, and a 24 per cent stake in Telecom Italia.