French media and telecoms group Vivendi has rejected what it said was a demand from shareholder Sebastian Holdings to break itself up, while denying the fund had made a bid approach worth over €40 billion.
Vivendi shares rose more than 5 per cent on the news, which came as it posted a forecast-beating first-quarter underlying profit and raised its current-year forecast.
By 9.40am, its shares were up 4.63 per cent at €29.08.
A source close to Sebastian Holdings, an investment company linked to Norwegian investor Alexander Vik, said it had made an approach at €33.5 a share for the whole of Vivendi.
"Following friendly discussions with them (Vivendi) and at their request we have submitted an offer of €33.5 a share," the source said today.
In recent weeks Vivendi, which runs the world's largest record company Universal Music Group, has been subject to speculation it could sell the company in parts to unlock value as it traded at a discount to analysts' sum of the parts valuation.
Vivendi said in its results statement the board had rejected a request by Sebastian to dismantle, arguing it was based on "unrealistic" economic and legal hypotheses.
"There has been an offer for the whole of the group...of more than €40 billion ... It is difficult to understand how an offer to buy the group could be interpreted as a break-up offer," the source close to Sebastian said.
However, a spokesman for Vivendi said: "Vivendi denies having received an offer, it has received nothing firm and structured."
Sebastian Holdings, which owns more than 4 per cent of Vivendi, declined to comment.
Vivendi had a market capitalization, based on Tuesday's market close, of €32.1 billion.