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An activist investor in Vivendi has argued that plans to break up French billionaire Vincent Bolloré’s media conglomerate represents “an extreme case of where minority rights are being undermined” and is urging its fellow shareholders to vote against the proposal.
On Tuesday Vivendi announced that it would press ahead with plans to break up the group and would present them to shareholders for a vote on December 9.
The proposed demerger includes listing its pay-TV business Canal+ in London, moving advertising group Havas’s listing to Amsterdam, and floating its publishing division Louis Hachette Group in Paris. Vivendi will remain listed in Paris and will manage a number of investment stakes.
Vivendi has said that the break-up, which it has been examining since December, would help it close the gap between the value of its individual businesses and that of the overall group, and enable the independent development of the companies.
However CIAM, a Paris-based asset manager, disagrees.
“These three demergers on foreign markets will not close the discount,” said Anne-Sophie d’Andlau, co-founder of CIAM and a Vivendi shareholder since 2018. “They represent an extreme case of where minority rights are being undermined . . . the implications of the demerger go beyond shareholder rights and threaten market integrity.”
CIAM’s stake in Vivendi is less than one per cent, according to people familiar with the situation.
Vivendi’s main shareholder Bolloré controls both the board and the share capital, and he has long attracted scrutiny over issues of corporate governance. CIAM is the latest investor to launch an activist campaign at the group, which has largely managed to rebuff previous attempts by the likes of Third Point, Bluebell Capital and Artisan Partners.
It is worried that the choice of foreign listing venues for the demerged businesses is a strategic move by the Bolloré Group, which is majority controlled by the family, that would strip Vivendi of its essential assets, while allowing it to expand its voting rights without launching a public offer, and in doing so give the controlling shareholder even greater control.
CIAM’s co-founder Catherine Berjal argued it might enable the Bolloré Group to “increase its stake at the cheapest price” and to “get control without having to launch a takeover offer”. This is because in each of the proposed new listing locations, regulations allow the Bolloré Group to bypass the public takeover thresholds required under French law, notably the requirement of a public offer once a certain level is reached.
CIAM has written to the French regulator, the Autorité des Marchés Financiers, asking it to direct the Bolloré Group and the companies with which it acts in concert to file a tender offer for Vivendi shares. “As they’re stripping out the main assets of Vivendi, they will have to offer an exit strategy for minority shareholders,” said d’Andlau,
Under Vivendi’s split plans, each shareholder participating in the spin-off would receive one share in Canal+, one in Havas and one in the Louis Hachette Group while also retaining their Vivendi shares, the company said on Tuesday.
Vivendi declined to comment. The group “has responded formally point by point to CIAM’s arguments as presented to the AMF,” said a person with knowledge of the situation. Vivendi’s proposed plan “was built on shareholder democracy”, they added.
