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With shareholders of Vivendi SA and Canada’s Seagram Co. to vote Tuesday on the companies’ planned $34 billion friendly merger, the French group’s chairman has pledged to dismantle its defenses against a hostile takeover. Jean-Marie Messier, chairman of the media-to-utility conglomerate Vivendi, said at a conference here last Thursday that he would move to cut back a controversial cap on shareholder voting rights, implemented last April on fears of a creeping hostile takeover of the company by Rupert Murdoch. In a move to counteract low shareholder turnout at shareholder meetings, Messier gained approval of a provision by which Vivendi investors holding more than 2 percent of the equity have their additional votes counted in proportion to all the votes cast at shareholder meetings. This limit, which reduces the influence of a would-be predator, would be lifted, Messier said last week, when shareholders present at meetings represent more than 60 percent of the group’s share capital. The proposal will be voted on at a shareholders meeting next year set to examine 2000 results of Vivendi Universal, as the combined corporation will be named. “There’s little likelihood that Vivendi Universal will now fall victim to a hostile takeover,” said Laurence Boisseau, banking analyst at brokerage Natexis Capitalin Paris. “The new group is too big. Murdoch is occupied elsewhere.” Furthermore, the voting limit is seen as facing opposition from shareholders of the combined Vivendi-Seagram company. “Now that Messier is a global manager he has to play by global rules. He has moved on this one because he understands the power of the U.S. and U.K. institutions,” said Sophie L’Helias, a Franco-American shareholder activist who is head of L’Helias Governance Advisers in Washington, D.C. L’Helias noted, however, that shareholders’ representation at Vivendi meetings runs at an average 30 percent, and said that a 40 percent to 50 percent level “would have been better” than the 60 percent threshold Messier proposed. Colette Neuville, president of the French Association of Minority Shareholders, went further, criticizing Messier’s 60 percent threshold as “exorbitant.” “He should scrap the limits completely. There is no reason to penalize those present at a shareholders meeting,” said Neuville. Last week, France’s audiovisual regulator, Conseil Superieur de l’Audiovisual, gave approval of Vivendi’s merger with its Canal Plus pay-TV unit and entertainment giant Seagram, clearing the way for the deal. Vivendi and Seagram shareholders will vote Tuesday on the merger. Canal Plus investors vote on Wednesday. But even with regulatory approval and shareholder backing, it may not be smooth sailing for the new Franco-Canadian media behemoth: Messier came under attack Friday from a representative of the French film industry, Pascal Rogard, who said he will ask a court to force more concessions from the company — specifically, more money for Canal Plus, which is the main source of finance for French films. Rogard, administrator of the screenwriters, directors and producers association, known as ARP, said the group would take the matter to the Conseil d’Etat, the civil court. Moreover, activist Neuville is also set to pursue an action against Vivendi Universal, in the French commercial courts, to challenge what she claims are unfair voting provisions. Copyright (c)2000 TDD, LLC. All rights reserved.

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