February 28, 2020 / 1:37 PM / a month ago

Telenet shareholder CIAM calls for $1 bln special payout

BRUSSELS, Feb 28 (Reuters) - Hedge fund CIAM has requested an exceptional dividend payout of 970 million euros ($1.05 billion) from Belgium’s Telenet citing management underperformance, a letter from the Paris-based activist investor showed on Friday.

CIAM is “concerned by Telenet’s financial performance” and “management’s poor execution and lack of pro-share price behaviour”, it said, without specifying what actions it wants the company’s board to take.

The fund holds a 1.26% stake.

It said the payout could be funded with 130 million euros from leftover 2019 adjusted free cash flow and 840 million euros from releveraging the balance sheet.

“We are in contact with other shareholders and we understand they agree with what we have asked the company,” CIAM CEO Catherine Berjal told Reuters on Friday.

“We think we’re going to be successful,” Berjal said.

Telenet shares were down 0.34% at 34.70 euros on a Bel 20 Index down 0.4% at 1326 GMT.

Telenet said it “remains committed to maintaining a constructive dialogue” with CIAM and already had plans to meet the fund on March 9 on the sidelines of a management roadshow.

CIAM said Telenet’s management is “extremely unambitious” and that majority owner Liberty Global uses its influence to prevent the “required actions to revert the share price trajectory”.

Telenet were taken to court in November 2018 by minority activist shareholder Lucerne Capital Management which voiced concerns about corporate governance.

$1 = 0.9201 euros Reporting by Marine Strauss @StraussMarine and Maiya Keidan; additional reporting by Clara Denina; editing by Jason Neely

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