By Mathieu Rosemain and Leo Marchandon
PARIS, May 27 (Reuters) – Bollore CEO Cyrille Bollore on Wednesday urged Universal Music Group to reject Bill Ackman’s takeover proposal, saying the offer undervalued the label, relied on the company’s own cash and did not fit its long-term strategy.
Speaking at Bollore’s annual shareholder meeting, Cyrille Bollore said the Bollore family saw no reason to accept Pershing Square’s $64 billion bid. Vincent Bollore owns 18.4% of UMG and Vivendi holds 13.4%, enough to block the deal.
“We think the price is not there at all,” Cyrille Bollore said. “He is not making an offer with his own money. It is our money, the company’s money.”
The remarks were the first direct public comments from a key UMG shareholder on Ackman’s unsolicited approach.
UMG declined to comment. A representative for Ackman was not immediately available for comment.
Ackman said in April that his first call before launching the bid was to the Bollore family. He also said that, without the Bollore family’s backing, “we don’t have a transaction.”
LOGIC OF BID QUESTIONED
Cyrille Bollore also questioned the industrial logic of the proposal.
He said the family was under no pressure to sell, adding that Bollore had 5.6 billion euros in cash and was distributing 4.5 billion euros to shareholders. He also criticised Ackman’s management style and said he supported UMG’s current strategy of expansion and acquisitions.
“I encourage the management of Universal Music to reject it,” Cyrille Bollore said. “As far as I am concerned, it is as if it has been rejected.”
Ackman’s plan includes 9.4 billion euros in cash plus 0.77 shares of new stock for each UMG share, and a shift of UMG’s main listing from Amsterdam to the United States. UMG said in April it would sell half its stake in Spotify after Ackman argued the market was not fully valuing that holding.
($1 = 0.8587 euros)
(Reporting by Matthieu Rosemain in Paris and Leo Marchandon in Gdansk; editing by Dominique Vidalon and Matt Scuffham)
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