Rumour Mill: Will Vodafone sell off its SFR holding?

Having been the centre of speculation over many years, reports carried by French newspaper Le Figaro say that Vodafone is ‘psychologically' preparing to sell its 44 per cent stake in French operator SFR to Vivendi.

The report claims Vodafone is entertaining the notion amid board pressure to offload certain non-core assets to focus on acquisitions in emerging markets--a suggestion given some weight following recent remarks from its CEO, Vittorio Colao, that he did not consider his minority stakes in Verizon Wireless and SFR as long-term assets. However, he failed to indicate when Vodafone might be ready to sell either of these two valuable assets.

Jean-Bernard Levy, chairman of Vivendi, has previously said that he was confident he could persuade Vodafone to sell its minority stake in the French mobile phone operator SFR--eventually. However, he has also failed to explain how Vivendi could raise the estimated €6 to €7 billion that Vodafone might demand for the sale.

Such a move would provide Vivendi with additional cash flow and give it more freedom to compete in the French market, but would clearly conflict with the company's strategy to reduce its reliance on mature French businesses and gain more revenues from emerging markets strategy.

Vodafone's Colao might also struggle to identify an attractive target in a growing market for the €6 or €7 billion it would gain from the sale.

No early outcome looks likely--as is the case for Vodafone's minority holding in Verizon Wireless.

For more on this story:
Telegeography and Financial Times

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