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PREVIEW-Vivendi faces investor test over plans for Universal spin-off

* June 22 shareholder meeting to vote on plan

* Backlash brewing over transaction’s structure

* Activist funds say plan to benefit Bollore

* Norway wealth fund among those backing UMG spin-off

PARIS, June 21 (Reuters) - French media group Vivendi will seek investor support on Tuesday to spin off its prized Universal music business, a plan criticised by activist funds for benefiting top shareholder Vincent Bollore more than smaller investors.

The world’s biggest music label, home to pop stars such as Lady Gaga and Taylor Swift, is valued at 33 billion euros ($39 billion) by Vivendi, or more than the group’s own market value.

While the spin-off looks set to clear a first hurdle with backing at the June 22 shareholder meeting, a backlash is brewing over the transaction’s structure and Vivendi’s secretive governance. This has set the scene for a stand-off between Bollore and some investors who hope to pressure the group to yield more cash or provide clarity over its long-term plans.

The stakes are high, including for investors who plan to take a direct slice of Universal Music Group (UMG).

William Ackman’s Pershing Square Tontine Holdings, a special purpose acquisition vehicle, has signed a deal to buy 10% of the music business. A consortium led by Chinese giant Tencent already has a 20% chunk.

Bollore, Vivendi’s controlling shareholder with 27%, is seeking to cash in by listing UMG in Amsterdam, and distributing 60% of Universal’s shares to Vivendi investors.

U.S. investment fund Artisan Partners, which has declined to comment on the size of its stake in Vivendi, opposed the distribution structure earlier this month and said that the sale of chunks of UMG ahead of its listing was detrimental to minority shareholders.

EXTRA CASH DIVIDEND

However, the spin-off has already won some investor backing, with proxy advisors Glass Lewis and ISS advising a vote in favour and Norway’s $1.35 trillion sovereign wealth fund, with a 1.49% stake in Vivendi, saying it would back the resolution.

Even activist fund Bluebell Capital Partners, which has also publicly questioned the spin-off, said it would give it the thumbs up.

“We will vote in favour of the spin-off because this is happening and no one will be able to stop it,” said Giuseppe Bivona, a partner at Bluebell.

But Bluebell, which is asking for an extra cash dividend of around 3 billion euros to make the deal more attractive, has along with proxy advisors taken aim at another proposed resolution, which would allow Vivendi to buy back and cancel its shares for up to 50% of its capital.

The fund has questioned whether it could allow Bollore to increase his stake in Vivendi without making a tender offer. Bollore’s family-owned group pledged that it will not request an exemption to file a tender offer on Vivendi’s shares if it crosses the 30% threshold in capital ownership.

Billionaire hedge fund manager Daniel Loeb’s Third Point, which owns a substantial stake in Vivendi, has not publicly said whether it would support the Universal spin-off or not. ($1 = 0.8432 euros)

Reporting by Mathieu Rosemain, Sarah White, Pamela Barbaglia and Gwenaelle Barzic; Editing by Emelia Sithole-Matarise

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