Vivendi Plans Extra Payout in Compromise With ShareholderRudy Ruitenberg and Marie Mawad
Vivendi SA agreed to pay an additional dividend of 2 euros ($2.16) a share to accommodate demands by Wall Street activist Peter Schoenfeld for bigger returns.
The Paris-based owner of France’s biggest pay-TV company and the world’s largest music company said Wednesday it will consider further payouts should its acquisition strategy require less cash than expected over the next two years.
The compromise with Schoenfeld ends a more than two-week battle between the activist investor and Vivendi over how the company should spend its cash pile, amassed from selling nearly $30 billion of assets. Vivendi is helmed by billionaire businessman Vincent Bollore, the company’s chairman and biggest shareholder.
“Vivendi’s management board decided that, in order to reach consensus with some minority shareholders, payouts to shareholders could be accelerated,” the company said.
Shares of Vivendi advanced 2.8 percent to 24.33 euros at 9:19 a.m. in Paris. They have gained 18 percent this year.
As the company prepares for its annual shareholder meeting on April 17, Schoenfeld had argued management isn’t handing enough money to shareholders, and filed a resolution for a bigger dividend. The founder of P. Schoenfeld Asset Management called for higher returns from Vivendi’s 18 billion-euro cash pile, demanding 9 billion euros in payouts and the sale of the Universal Music Group unit.
Following meetings in recent days, PSAM told management it accepts the company’s strategy of building on the assets of Universal Music and TV unit Canal Plus, and withdraws its draft resolutions, Vivendi said.
Vivendi has been seeking acquisitions to add to its television and music assets and build a bigger media business. The company this week disclosed exclusive talks to buy Orange SA’s Internet video service Dailymotion, a rival to YouTube.
Vivendi’s February proposal to return 5.7 billion euros through dividends and buybacks was lower than analysts expected, and repurchases were capped to shares priced at a maximum of 20 euros each -- the stock has been above that price since January.
The additional payouts will be made as a 1-euro dividend in the fourth quarter of this year and another in the first quarter of 2016, raising the total return to shareholders to 6.75 billion euros, Vivendi said.
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