PARIS (Reuters) - Vivendi (PA:VIV) has traded blows with activist investor PSAM over the fund's bid for a larger payout from the French media group, with Vivendi warning the fund could be in breach of the law and the fund accusing it of attempting to intimidate it.
PSAM, or P. Schoenfeld Asset Management, which says it owns 0.8 percent of Vivendi, has called on other minority shareholders to join its campaign for a 9 billion euro ($9.8 billion) payout, while also urging the company to consider spinning off its Universal Music Group (UMG) unit.
But Vivendi says if it joins forces with others, PSAM could be in breach of French law, which it says bans foreign ownership of more than 20 percent, a limit which if reached would put it at risk of losing its licence for Canal+ television.
A spokesman for Vivendi said on Saturday the company would decide at the beginning of next week on whether to take any further action after looking at PSAM's response in detail.
"Insofar as it would appear that your direct or indirect share ownership, together with that of third parties with whom you might join forces, could surpass the 20 percent threshold, this could be seriously prejudicial to the company," Vivendi said in a letter on Friday.
"We would be forced to promptly bring legal action against you," it added, saying a first estimate showed it could seek damages of between 5 and 9 billion euros.
In response, PSAM said: "Now, as a result of our decision to propose two resolutions to shareholders, we have received a letter whose purpose seems to be to intimidate us. We consider this behaviour totally unacceptable."
Vivendi has said it plans to return 5.7 billion euros to shareholders by 2017, while keeping back cash to invest in growth and acquisitions. But PSAM's resolutions would require Vivendi to make a larger payout from a cash pile amassed via disposals.
Vivendi confirmed it had received the proposed resolutions and recommended shareholders reject them at its April 17 meeting.
PSAM also said Vivendi should publish details of foreign ownership and asked if it had sent the same letter to other shareholders. The Vivendi spokesman said it had sent its letter to all U.S. shareholders and details of its main shareholders was public.
He said it had sent the letter to PSAM to point out it was "in danger of bringing around some sort of dangerous coalition ... The management's board job is to make sure everybody understands the law."
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