Vivendi Rejects Investor’s Call for Universal Music Spinoff

Vivendi SA rejected a call by an activist investor to spin off its music business and said it will examine a proposal for higher dividend.

The company rebuffed a December suggestion by New York-based hedge fund P. Schoenfeld Asset Management LP for Vivendi to spin off its Universal Music Group unit, Paris-based Vivendi said Monday. UMG is the world’s largest music company with annual sales of about 4.6 billion euros ($5 billion).

P. Schoenfeld, which owns just under 1 percent of Vivendi’s shares, proposed Monday that the company pay shareholders 9 billion euros ($9.87 billion), according to a statement. The special dividend should be in two parts, according to the plan - - 2.86 billion euros for the year ended Dec. 31, and 6.14 billion euros from “share issue premium, merger premium and contribution premium.” Vivendi said it will study the proposal.

P. Schoenfeld also said it shared with Vivendi a white paper analysis critical of the company’s capital allocation and valuation.

Vivendi’s proceeds from selling more than $30 billion of assets to refocus to media from telecommunications has sparked questions about how the company, led by shareholder and Chairman Vincent Bollore, plans to spend its money. Vivendi has unveiled plans to return about $6.4 billion to investors and has said it’s seeking acquisitions to build a European media and content company.

Not for Sale

Chief Executive Officer Arnaud De Puyfontaine told journalists in London on March 17 that UMG, which has signed artists from Rihanna to Nicki Minaj, isn’t for sale.

“Over my dead body,” he said at the time.

“The management board opposes the dismantling of Vivendi and reaffirms its desire to build a Paris-based, global industrial content and media group,” Vivendi said in Monday’s statement.

The shares rose 3.3 percent to 22.90 euros at the close in the French capital.

P. Schoenfeld has previously pushed for deals at companies including Jos. A. Bank Clothiers Inc. In 2013, it opposed T-Mobile US Inc.’s merger with MetroPCS Communications Inc., eventually backing the deal after T-Mobile revised its offer.

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