Bulls Cheer Vivendi as Clash With Activist Schoenfeld Escalates

By Inyoung Hwang

Investors see a bullish outcome to Vivendi SA?s tussle with Wall Street activist Peter Schoenfeld.

Traders may be betting that the French media company?s chairman, Vincent Bollore, will at least partially cave in to Schoenfeld?s demands to increase shareholder returns, says Liberum Capital Ltd.?s Ian Whittaker. Calls are the most expensive versus bearish puts in nine months, one-month options data compiled by Bloomberg show.

The founder of P. Schoenfeld Asset Management has called for higher returns from Vivendi?s 18 billion-euro ($19.8 billion) cash pile, demanding 9 billion euros in payouts and the sale of the Universal Music Group unit. Vivendi shares jumped more than 3 percent on the day it announced Schoenfeld?s dividend request, and have since outpaced European peers.

?Investors could be buying the options betting that Bollore will do something,? said Whittaker, an analyst at Liberum in London. ?Maybe he?ll throw a bone out there that could satisfy some people.?

Vivendi?s proceeds from selling more than $30 billion of assets to refocus to media from telecommunications has sparked questions about how the company plans to spend its money. The stock advanced 1.1 percent at 3:11 a.m. today in London, near a 6 1/2 year high, after Vivendi offered to buy Orange SA?s video-distribution site Dailymotion.

Bollore, France?s ninth-richest person with a net worth of about $6 billion, has faced opposition to his plans for companies before. Last week he upped his holdings in Vivendi for a second time, boosting it to 12.01 percent, and is advising shareholders to vote against Schoenfeld?s plans at an April 17 meeting. Schoenfeld?s firm owns 0.8 percent.

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