Activist Calls for $4 Billion Payout in Vivendi’s Music Spinoff

Activist hedge fund Bluebell Capital Partners is pushing Vivendi SA to pay billions of euros in cash to shareholders when it spins off Universal Music Group, the world’s biggest music company.

The London-based money manager made the demand in a letter to Vivendi Chief Executive Officer Arnaud de Puyfontaine, saying the current plan to distribute 60% of Universal Music shares to Vivendi stockholders is tax inefficient.

It’s asking for an additional extraordinary cash dividend of about 2.8 euros per share, or around 3.3 billion euros ($4 billion), according to the letter seen by Bloomberg and confirmed by Bluebell Chief Investment Officer Giuseppe Bivona.

“Vivendi will effectively enhance the attractiveness of the distribution in kind and defuse the perception that the overall transaction (distribution in kind, share buy-back) has been designed to optimise the position of a particular shareholder group to the detriment of minority shareholders,” Bluebell partners Bivona and Marco Taricco wrote in the letter, dated May 21.

Billionaire Vincent Bollore effectively controls Vivendi via his holding company’s 27% stake in the French media group.

“We always listen attentively to all our shareholders, including the small ones,” a Vivendi spokesman said.

Bluebell also asked Vivendi to move a planned Universal Music listing from Euronext to the New York Stock Exchange, or consider a dual listing to boost the liquidity of the shares.

Universal Music has driven most of Vivendi’s growth in recent years as the home of stars like Taylor Swift and Ariana Grande capitalized on the boom in music streaming. Vivendi’s other main interests lie in pay-television, advertising and publishing.

It’s not clear if Vivendi plans to structure the spin-off in a way that allows it to keep control over Universal Music.

Bivona co-founded Bluebell in 2019 with fellow finance industry veteran Taricco and Francesco Trapani, who ran Italian jeweler Bulgari SpA for nearly three decades. The firm manages about $90 million, with Vivendi one of its biggest investments.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.