Activist investor Third Point has taken a stake in Vivendi, the media group controlled by French billionaire Vincent Bolloré, as a shareholder vote on his proposed split from Universal Music Group looms.
The New York-based hedge fund led by Daniel Loeb has built a “substantial” position in the French media conglomerate in recent months, a source close to the fund said.
Vivendi said he had no information on the issue at this point.
Third Point declined to comment on how it plans to use its stake. Its investment comes as Vivendi closes an agreement to sell a stake in Universal Music to Bill Ackman’s blank check company. If Loeb opposes the deal, it would pit two titans in the investment world against each other.
Pershing Square Tontine Holdings, an ad hoc acquisition company created by Ackman, said earlier this month that he was in talks to buy a 10 percent stake in Universal Music, the label behind artists such as Lady Gaga and Taylor Swift, for around $ 4.1 billion.
The deal would value Universal at over $ 40 billion. However, contrary to tradition Spac mergers, he would not take the group to the stock market. Vivendi instead plans to split up Universal Music and distribute 60% of the group’s capital to investors. Universal would then be listed on Euronext Amsterdam in the third quarter of 2021.
Vivendi shareholders will vote on the distribution of Universal Music on June 22. Some investors, including activist hedge fund Bluebell, have already raised concerns about the proposal.
Marco Taricco, co-founder of Bluebell, which owns a small stake in Vivendi, said at the time that the valuation “looks disappointing”. Bluebell sent Vivendi two letters in May regarding the separation of the group’s biggest asset.
The London-based fund said the spin-off was a good idea in principle, but questioned the structure, known as a dividend-in-kind, which it said would hit minority shareholders with significant tax burdens. . Bluebell has asked Vivendi to pay its shareholders an additional extraordinary cash dividend of approximately 3.3 billion euros.
Artisan Partners, another Vivendi shareholder, is said to have spoken out against the proposed deal with Ackman, echoing Bluebell’s concerns about the tax bill arising from the distribution of shares, according to Bloomberg.
If shareholders vote against the in-kind distribution at next week’s meeting, it could jeopardize Ackman’s plans to invest in Universal Music.
Vivendi only needs a simple 50 percent majority to approve universal separation. Bolloré, whose holding company holds 27% of Vivendi’s capital, effectively controls the group with 29.73% of the voting rights.
