PSAM Questions Corporate Governance At 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 23^rd.

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:

1. 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.
2. Based on publicly available information, Vivendi has sufficient distributable profit and premium to implement PSAM's proposed resolutions (from a legal and accounting perspective).
3. 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 3^rd (a date when proceeds from disposals should have been received).
4. 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.
5. 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.
6. 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
212-929-5500 / +44 20 3026 2807
[email protected] / [email protected]

For Media Inquiries:
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Anne- France Malrieu
Ph : + 33 1 53 70 74 66
C : + 33 6 89 8 761 18
[email protected]

Estelle Guillot-Tantay
Ph : + 33 1 53 70 74 93
C : + 33 6 87 60 49 58
[email protected]

ASC Advisors
Steve Bruce/Taylor Ingraham
(203) 992-1230
[email protected] / [email protected]

SOURCE P. Schoenfeld Asset Management LP