-- Sends Letter to Company Board
-- Supports PhiTrust's "Florange Law"
Resolution
-- Again Clarifies Misrepresentations Made by
Vivendi
NEW YORK, March 30, 2015 /PRNewswire/ -- P. Schoenfeld
Asset Management LP ("PSAM"), a shareholder since July 2012, today announced that it has sent a
letter to the Board of Vivendi (EPA: VIV) (the "Company")
containing questions concerning corporate governance at Vivendi as
well as seeking clarification of recent actions taken by Vivendi
Board Chairman Vincent Bollore. A copy of the letter is
available at www.valuecreationatviv.com.
PSAM believes all shareholders deserve prompt answers from
Vivendi to the questions posed and should be informed about the
issues referred to below:
1. By not
distributing adequate cash to shareholders and providing vague
guidance about Vivendi's acquisition plans, Mr. Bollore and
Vivendi's Management Board are asking investors to have blind faith
in their plan for the company's future. However, Mr. Bollore
clearly does not have a detailed strategic plan for Vivendi
(including with respect to capital allocation) since the Bollore
Group recently purchased millions of Vivendi's shares in the
market; knowledge of any such plan would be sensitive market
information and would have restricted Mr. Bollore from acquiring
shares. In the absence of a capital allocation strategy for
Vivendi, the significant excess available cash should be
distributed to the shareholders, as requested in the two
resolutions submitted by PSAM to the Board on March 23rd.
2. The Bollore
Group very recently doubled its stake in Vivendi to approximately
10% as of March 26, 2015, thus
benefiting from Vivendi's undervaluation and the absence of a
detailed capital allocation plan. PSAM is concerned that such
opportunistic purchases by Bollore Group cede de facto control of
Vivendi to Bollore Group (or Mr. Bollore) without having to pay the
silent and disenfranchised majority investors a control premium for
their shares. The failure to utilize Vivendi's buyback
program facilitates this situation as it provides Mr. Bollore
control over Vivendi's core assets and cash resources at a low
valuation as passive shareholders are forced to merely observe.
3. As of
June 4, 2014, Vivendi was authorized
by shareholders to buy back shares at a maximum price of €24.00 per
share. On October 20, 2014 and
February 27, 2015, the Management
Board and the Supervisory Board respectively decided to lower the
maximum price to €20.00 per share without explanation.
Shareholders should be told why the buy back price was
lowered from €24.00 to €20.00.
4. In late 2012,
2013 and 2015, Bollore Group engaged in multiple financing
transactions totaling approximately €1.4 billion involving
Vivendi's stock with very limited public disclosure. We
believe that members of the Supervisory Board should be provided
with detailed terms and conditions of these transactions. In
addition, the Supervisory Board should confirm to shareholders that
such transactions do not hedge the Bollore Group's economic
exposure to Vivendi shares that the Bollore Group expects to vote
at the annual general meeting.
5. The
implementation of double voting rights supported by the Boards
under the "Florange Law" would allow Mr. Bollore to exert even more
influence over Vivendi, leveraging his ownership into de facto
control. In order to discourage additional behavior that PSAM
believes is detrimental to Vivendi shareholders, PSAM strongly
supports and will vote in favor of PhiTrust's resolution to prevent
double voting under the "Florange Law" from taking effect.
PSAM also addressed misrepresentations made by Vivendi regarding
PSAM's resolutions and would like to stress the following:
- Contrary to Vivendi's allegations, there is no firm commitment
by the Company to pay more than a single one-euro dividend after 2015. Further
dividend announcements are purely speculative "objectives."
Vivendi's price cap on its share buyback plan demonstrates
that there is no willingness to implement it. The buyback
plan is merely an authorization, not an obligation. As a
result, there is only a one euro
obligation under the Board's plan for the foreseeable future vs. a
€6.66 September distribution under our two resolutions.
- Based on publicly available information, Vivendi has sufficient
distributable profit and premium to implement PSAM's proposed
resolutions (from a legal and accounting perspective).
- PSAM has taken into consideration Vivendi's cash constraints in
proposing in its resolution that a dividend of €6.66 per share be
paid on September 3rd (a
date when proceeds from disposals should have been received).
- Distributing unallocated cash reserve cannot constitute an act
of mismanagement; to the contrary, the decision of the Management
Board to retain huge excess cash that is not allocated is
questionable from a management perspective and has led to
underperformance in the equity markets.
- With €5 billon excess cash post PSAM's proposed distribution
and approximately €4 billion of marketable securities, Vivendi will
still have the capacity to significantly expand its scope of
operation and the company could retain all the financial
flexibility it requires.
- PSAM has never called for the dismantling of Vivendi. An
IPO, partial spin or full spin of UMG to all shareholders are all
suggestions for unlocking the value of an asset that PSAM believes
is misunderstood by the market.
In closing, PSAM urges Vivendi to provide answers to these
questions and address these issues well in advance of the
shareholder meeting so investors can make better educated decisions
on the proposals before them.
About PSAM
PSAM was founded by Peter M. Schoenfeld. PSAM has been
providing investment advisory services since 1997, with offices in
New York and London. PSAM
has approximately $3.4 billion in
assets under management and invests in both equity and credit
securities in global event driven opportunities.
Additional Information
This press release is for
informational purposes only and is not intended to constitute, and
should not be construed as, an offer to sell, a solicitation of any
offer to buy, an offer to purchase or a solicitation of consents
with regard to any securities of Vivendi (the "Company", and such
securities, the "Securities").
This release may contain forward-looking statements. Such
statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "intends," "may,"
"estimates," "will," "should," "plans" or "anticipates" or the
negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. These
forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from the suggested by the forward-looking statements. The
information provided in this press release is derived from PSAM's
analysis and subjective views on the Company and its Securities.
Other persons, including the Company, may have different
analysis and views on the information provided herein.
No reliance is accepted on this press release and PSAM disclaims
any liability in relation to this press release. Investors
shall only rely on their own assessment prior to taking any
decision in relation to the Company and/or the Securities.
PSAM do not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
For Investor Inquiries:
MacKenzie Partners, Inc.
Dan Burch/Bob Marese
+1-212-929-5500 / +44 20 3026 2807
dburch@mackenziepartners.com / bmarese@mackenziepartners.com
For Media Inquiries:
Image 7
Anne- France Malrieu
Ph : + 33 1 53 70 74 66
C : + 33 6 89 8 761 18
afmalrieu@image7.fr
Estelle Guillot-Tantay
Ph : + 33 1 53 70 74 93
C : + 33 6 87 60 49 58
egt@image7.fr
ASC Advisors
Steve Bruce/Taylor Ingraham
+1 (203) 992-1230
sbruce@ascadvisors.com / tingraham@ascadvisors.com
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