April 2, 2015 / 8:21 AM / 4 years ago

Bollore raises Vivendi stake again as shareholder battle looms

PARIS (Reuters) - Tycoon Vincent Bollore raised his stake in French media group Vivendi (VIV.PA) for the third time in a month to reach 12 percent as he gears up for a fight with activist shareholders.

Vincent Bollore (L), the current vice-chairman of Vivendi and largest shareholder, attend the company's shareholders meeting in Paris, June 24, 2014. REUTERS/Benoit Tessier

To solidify his hold on the group, Bollore - Vivendi’s chairman and largest shareholder - plans to keep buying shares and may seek more board seats, according to a disclosure to the French markets authority.

U.S. hedge fund P. Schoenfeld Asset Management (PSAM), which says it owns 0.8 percent of Vivendi, wants shareholders to back two resolutions at an April 17 annual meeting that would require Vivendi to return 9 billion euros ($9.7 billion) to investors after selling four of its six businesses.

Another fund wants to prevent Vivendi from putting into place double voting rights for holders who own shares for more than two years, as French law allows.

The fight is over the future of Vivendi, which has been through a radical slim-down in the past two years under Vincent Bollore. At issue is how it spends the proceeds from the asset sales, the group’s strategy, and how much power Bollore should have versus other shareholders.

Having exited telecoms and video games, Bollore and Vivendi management now want to build the group up into a stronger media group by adding to its Universal Music Group and French pay-TV operator Canal Plus, and making acquisitions.

PSAM founder Peter Schoenfeld told Les Echos newspaper in an interview that he was “optimistic” of winning the support of a majority of shareholders but that it was still too early to say.

“Our action can lead to a rise in Vivendi’s share price, which will put it in a better position to make acquisitions and build a large group ... our aim is not to break up Vivendi,” he said.

“The only thing we are asking is better remuneration for shareholders and a clarification of the strategy.”

PSAM has accused the company of giving too much leeway to Bollore to boost his stake at “undervalued prices”. It has also urged the company to consider spinning off part or all of its Universal Music Group.

Bollore Group bought a further 24.6 million Vivendi shares, raising its stake to 12.01 percent from 10.2 percent. It now holds 162 million shares worth 3.8 billion euros.

Bollore paid 23.08 euros a share, compared with Wednesday’s closing price of 23.50 euros. The stock was trading down 1.6 percent at 23.13 euros by 0957 GMT on Thursday.

“With the power struggle between him and certain shareholders, Bollore will continue to buy as many Vivendi shares as possible on the market between now and the April 17 AGM,” one Paris-based trader said.

Schoenfeld told Les Echos that he had asked to meet Vincent Bollore several months ago, and that a series of dates were agreed but then canceled.

“We are raising a simple question: how much room for maneuver do we want to leave Vincent Bollore?” Schoenfeld said.

A Vivendi spokesman denied that any meetings with Schoenfeld has been canceled, adding that the U.S. investor has been pushing to dismantle the group in several letters since 2013.

($1 = 0.9246 euros)

Editing by Vincent Baby and Susan Thomas

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