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Reuters

PARIS– U.S. mutual fund Craftsmen Partners on Thursday signed up with another minority investor in French media group Vivendi in opposing its spin-off of Universal Music Group (UMG), decrying the deal as undesirable to some financiers.

Activist fund Bluebell Capital Partners had actually currently questioned Vivendi’s strategy to capitalize its reward property– the music label behind artists such as Girl Gaga– through a distribution-in-kind to investors.

The offer– through which Vivendi intends to note Universal in Amsterdam and spin-off 60%to existing Vivendi investors– will be sent to a financier vote on June 22.

Craftsmen, which decreased to discuss the size of its stake in Vivendi, echoed Bluebell’s argument that the circulation structure was unfavourble to minority investors as it was not tax effective.

It stated it likewise opposed Vivendi’s strategy to sell portions of UMG ahead of the listing, such as a 10%holding which William Ackman remains in speak with obtain by means of his blank-check business Pershing Square Tontine Holdings.

” Selling pieces of UMG to other financiers in return for money is a sub-optimal capital allowance choice,” Craftsmen portfolio supervisor David Samra stated in a declaration.

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“We would choose that Vivendi spin off its whole ownership of UMG to the investors in a tax effective way.”

Vivendi decreased to comment.

UMG is valued at approximately35 billion euros ($43 billion), consisting of financial obligation, according to Vivendi.

Vivendi, managed by French billionaire Vincent Bollore, would still keep a piece of UMG after the spin-off. If it proceeds, Vivendi would have10%, Pershing Square10%, Bollore16%and a consortium led by Tencent20%.

Glass Lewis and ISS, the world’s 2 most significant proxy advisors, have actually suggested Vivendi investors vote in favor of the spin-off strategies. Glass Lewis stated Bluebell’s need for a greater money dividend to sweeten the offer for minority investors was “affordable.”

The 2 companies likewise advised financiers vote versus a resolution providing Vivendi the possibility of redeeming and canceling as much as 50%of its capital, stating it was not in investors’ benefits.

Glass Lewis pointed out Bluebell’s issues that Bollore might utilize this tool to increase his stake in the media group without making a tender deal.

($ 1=0.8215euros)( Reporting by Svea Herbst and Mathieu Rosemain Composing by Sarah White Modifying by Mark Potter)

Extensive reporting on the development economy from The Reasoning, gave you in collaboration with the Financial Post.

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