Vivendi reaches deal with activist shareholder to lift payouts

PARIS (Reuters) – French media group Vivendi said it reached a deal with activist U.S. hedge fund P. Schoenfeld Asset Management (PSAM) to increase payouts to investors, heading off a conflict ahead of its shareholder meeting later this month.

Vivendi said it had pledged to return 6.75 billion euros ($7.3 billion) to shareholders following talks with PSAM in the last few days, above the 5.7 billion it had previously earmarked but below the 9 billion euros PSAM had demanded.

PSAM and Vivendi have been at odds since March 23, when the fund called for an increase to the company’s planned payout to shareholders from a 35 billion euro cash pile amassed through a series of disposals.

Vivendi said PSAM, which says it owns 0.8 percent of Vivendi, had now dropped a series of resolutions it had tabled for the company’s April 17 annual shareholders’ meeting and would back management instead.

The French group added that it may propose additional payouts if it spends less on acquisitions than expected over the next two years.

“These distributions demonstrate our willingness to reach a consensus with some of our minority shareholders, even if it may result in reduced flexibility for Vivendi in the implementation of its strategic ambition to build a major media and content group,” Chief Executive Arnaud de Puyfontaine said.

Having exited telecoms and video games, Vivendi wants to build itself into a stronger media company by adding to its Universal Music Group and French pay-TV operator Canal Plus, and making acquisitions.

Puyfontaine told the Financial Times in an interview published on Wednesday that Vivendi was “thinking about transformational transactions” but was not interested in buying European pay-TV leader Sky or British broadcaster ITV.

Three sources familiar with the matter told Reuters Vivendi was looking at a possible purchase of Sky as one of several options to expand the reach of its own TV group. A Vivendi spokesman declined to comment on Tuesday.

(Reporting by James Regan– Editing by Elaine Hardcastle)