Vivendi awaits key shareholder vote on Common Music Group spin-off

Taylor Swift performs onstage during the Taylor Swift reputation Stadium Tour at Mercedes-Benz Stadium on August 11, 2018 in Atlanta, Georgia.

John Shearer – TAS18 – Getty Images for TAS

French media group Vivendi is awaiting a crunch vote from investors on its proposed spin-off of the iconic Universal Music Group.

If approved, the world’s largest music label — home to stars including Lady Gaga and Taylor Swift — will complete its listing on the Euronext Amsterdam in late September, Vivendi has said.

Shareholders are due to vote on the proposal Tuesday.

It comes after billionaire investor William Ackman’s SPAC Pershing Square Tontine Holdings signed a deal to buy 10% of UMG for around $4 billion, the companies announced over the weekend. The deal gave UMG an enterprise value of 35 billion euros ($41.55 billion),

A consortium led by Chinese titan Tencent Holdings already owns a 20% equity stake in the group. UMG accounts accounts for around three quarters of Vivendi’s profits.

Vivendi’s shareholder meeting commenced at 9 a.m. London time. Investors will vote on the proposed distribution of 60% of UMG’s share capital to shareholders, along with the Amsterdam listing.

Although the spin-off is expected to secure backing at the initial meeting, criticisms have been levelled by activist hedge funds Artisan Partners and Bluebell, who claim it disproportionately benefits top shareholder Vincent Bollore over smaller investors.

French billionaire businessman Bollore holds 30% of the voting rights in UMG. For the spin-off to pass, 50% need to vote in favor.

Shareholders will also vote on a plan to buy back and cancel up to 50% of Vivendi’s stock, which requires two-thirds support to pass.