Vivendi shareholders have turned the page on Universal Music Group (UMG). At a general meeting on Tuesday, they broadly approved its split, allowing Vivendi to refocus on the media, publishing and advertising. Presented last May, the project consists of distributing to shareholders – and in particular to the Bolloré group which controls Vivendi with 27% of the shares – the equivalent of 19.8 billion euros in the form of UMG shares, via a dividend in kind and an interim dividend.
The operation will be followed on September 21 by a listing of UMG on the Amsterdam Stock Exchange. In the meantime, it still has to obtain an agreement from the Dutch authorities, and obtain the decision of the management board to pay a deposit based on the result recorded in the first half of 2021. If the transaction goes through, each shareholder should receive one UMG share for each Vivendi share held. The general meeting also approved the payment of an ordinary dividend of 60 cents per share (around 650 million euros in total), similar to that of the previous year.
The major valued at 35 billion euros
At the head of a catalog ranging from the Beatles to Rihanna, via Taylor Swift or Lady Gaga, the major Universal installed in Santa Monica, California, is the jewel of the Vivendi empire, which also owns the Canal + groups, Havas , Editis, Gameloft, and now Prisma Media. Its valuation reached 35 billion euros when Vivendi announced an agreement with American financier Bill Ackman to sell him 10% of UMG’s shares, after 20% had already been sold to a consortium led by the Chinese technology champion. Tencent.
In the long term, Vivendi will retain only 10% of its major, of which around 18% will be held by the Bolloré group. The complex project had raised some concerns, in particular due to a lack of clarity on Vivendi’s use of the cash generated by all these operations. “The use of the proceeds of the sale (from 10% of UMG to Bill Ackman) and the final structure of the capital of the company remain uncertain”, had estimated in a note Agustin Alberti, the principal analyst of the group at Moody’s.
Vivendi will be able to buy back 50% of its shares
Vivendi, of which nearly 8% of the capital is treasury stock, also obtained by a vote of 73% of its shareholders the authorization to buy back up to half of its own shares, a very high limit which can be interpreted as a way for the Bolloré group to strengthen its control if these titles were to be canceled. According to a source close to Vivendi, this resolution aims rather to “have the means to defend oneself in the event of a hostile operation”. “In any event, this authorization would not be implemented before payment of the exceptional distribution”, indicated the group in a written response to questions from its shareholders.
“The repurchase of 50% of the capital could therefore relate to an amount of the order of 6 billion euros post-distribution”, lower than the authorizations to repurchase shares obtained in previous years, he added. To reassure the market, the Bolloré group has also committed in a letter not to request an exemption from the obligation to submit a public offer if it crosses the threshold of 30% of the capital via cancellations of shares.
With recently acquired stakes in the video-on-demand service Multichoice, the Spanish press group Prisa, and a 29% stake in the French group Lagardère which owns Hachette, Paris Match, the JDD, and Europe 1, Vivendi s’ getting ready to refocus on media, advertising and publishing.