Vivendi investors back spin-off of flagship Universal Music Group

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Vivendi shareholders back spin-off of flagship Universal Music Group

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French media group Vivendi has actually won the support of investors for its proposed spin-off of crown gem Universal Music Group.

Investors extremely backed the proposition — which would see the world’s biggest music label finish its listing on the Euronext Amsterdam in late September — throughout an investor conference on Tuesday.

The proposition includes circulation of 60% of UMG’s share capital to investors through the general public listing in Amsterdam.

The vital votes followed billionaire financier William Ackman’s SPAC Pershing Square Tontine Holdings signed an offer to purchase 10% of UMG for around $4 billion, the business revealed over the weekend. The offer provided UMG a business worth of 35 billion euros ($41.55 billion) for 100% of its share capital.

A consortium led by Chinese titan Tencent Holdings currently owns a 20% equity stake in the group. UMG represent around 3 quarters of Vivendi’s earnings.

Although the spin-off has actually protected financier support, criticisms have actually been leveled by activist hedge funds Artisan Partners and Bluebell, who declare it disproportionately benefits bigger investors, consisting of Vincent Bollore, over smaller sized financiers. French billionaire business owner Bollore holds 30% of the ballot rights in UMG.

Almost 3 quarters of investors likewise enacted favor Vivendi’s strategy to redeem and cancel as much as 50% of its stock.

Matti Littunen, European media expert at Bernstein, kept in mind that some financiers had bookings about the tax ramifications for smaller sized investors of the UMG spin-off, together with concerns about why Vivendi is not spinning off a bigger share of business, deciding rather to offer little parts to entities such as Ackman’s SPAC.

“Why sell some of it for cash and not distribute more to shareholders and let them figure out what to do with the proceeds?” he informed CNBC’s “Street Signs Europe” on Tuesday.

“In general, there is still lots of suspicion about the capital allocation for Vivendi after this deal, so as mentioned, lots of controversial aspects to this distribution.”