NEW YORK (The Deal) -- Activist investor P. Schoenfeld Asset Management doesn't expect to win its battle to force Vivendi to distribute €9 billion ($9.9 billion) of cash to shareholders but may still win part of the war it set out to fight.

The New York-based hedge fund believes Vivendi's shareholders are likely to reject its two motions to return cash to shareholders at a  meeting next month, according to a source close to the firm. It remains confident, however, that it can nudge Vivendi's chairman and largest shareholder Vincent Bolloré into explaining why he needs to hold onto the cash, and in doing so, possibly boost Vivendi's share price.

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"Bolloré has said he wants to turn Vivendi into a French Bertelsmann," said the PSAM source, referring to German media giant Bertelsmann SE. "Yet he has given no details of the road he will take and how he will use Vivendi's cash. He is treating Vivendi like a family holding, and they [PSAM] are saying, 'Explain your strategy or give us the cash.'"

P. Schoenfeld  has also used the vote to push for a review of Universal Music's place in the company. The activist, which owns about 0.8% of Vivendi, wrote to the Paris-based company's board three times last year asking it, among other things, to consider selling or separating the world's biggest music group. P. Schoenfeld claims UMG could be worth €14.5 billion to a strategic buyer and about €12.3 billion if spun off. It sees little reason to hold onto a business that has little evident synergies with Vivendi's other main operation, pay-TV operator Groupe Canal+.

Vivendi CEO Arnaud de Puyfontaine has said Vivendi will let go of UMG "over his dead body.

Vivendi's rejection of P. Schoenfeld's demand to return cash to shareholders was almost as emphatic. On Wednesday, the French company urged shareholders to vote against the activist's motions, warning that they endangered its strategy and would expose the company to possible litigation for "mismanagement".

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P. Schoenfeld is not alone in wondering what strategy might be endangered.

"While Vincent Bolloré's track record is indeed excellent, the time frame required to realize the gains may not be compatible with the needs of institutional asset managers," Sanford C. Bernstein analyst Claudio Aspesi noted on Wednesday. "Moreover, management has also explicitly decided to avoid providing any strategic or financial constraints on its future investments, which adds to the discomfort."

Analysts at Barclays Bank, UBS and Jefferies have each published notes within the past month criticizing Vivendi's lack of communication.

Vivendi "argues that 'Rome wasn't built in a day' but shareholders have little sense of what is being built, and no incentives to wait and see," Jefferies noted on March 3, following Vivendi's quarterly results.

P. Schoenfeld claims that Vivendi will have €14.7 billion of gross cash, and €18 billion of excess cash and marketable securities, by the time it receives all the funds from the recent sales of its telecommunications operations. The €18 billion figure is equal to about 60% of Vivendi's current market capitalization of €30.5 billion.

The French company has concrete plans to return just €3 billion of that cash to shareholders over the next two years. It has also said it could return an additional €2.7 billion through a share buyback, but only if its share price dips below €20.

That leaves Vivendi with a lot of cash to play with and investors a lot of reason to want to know what it has in store. Bolloré may still have investors' support, but it wouldn't hurt to let them into his confidence.

Vivendi shares dropped 0.5% to €22.96 at the close of Paris trading.

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