Many companies across Europe are effectively run by their largest shareholders. A trio of deals under discussion clearly demonstrate the dangers of this model.
At Vivendi, a US investor is agitating for the French media group to hand over more cash to shareholders and to spin off Universal Media Group, the world’s largest recorded music company. Peter Schoenfeld says UMG’s long-term profitability is “obscured” at present, and that half of Vivendi’s estimated €18bn in liquid assets by the end of 2015 should be paid out to investors.
Vincent Bolloré, though, Vivendi’s largest shareholder, with 8 per cent, and its chairman since last year, has vowed to create a media conglomerate, and its chief executive says UMG would be sold “over my dead body”. Mr Bolloré’s influence on Vivendi’s future could be increased further by a new French law that would give longer-term shareholders such as him twice as many votes as new investors.