Vivendi board gives nod to SFR demerger

The demerger of SFR from parent Vivendi gained further momentum this week after the Vivendi supervisory board agreed unanimously to the plan in order to focus on the group's media and content businesses.

In a statement, Vivendi said the plan could take the form of a distribution of SFR shares to Vivendi shareholders on the day of the transaction. It would offer them the opportunity to invest in two separate vehicles listed on the stock market and valued according to the specifics of their respective sectors, the company added.

For SFR, Vivendi said the demerger plan would offer the French operator "greater strategic autonomy to seize opportunities in a transforming market, reflecting the growing number of services and high-speed broadband access in an environment with a huge increase in usage."

The French group added that the plan will be submitted to the relevant works councils and regulatory authorities, with the details will be presented at a later stage. The group aims to include it on the agenda of the next annual shareholders' meeting at the end of June 2014.

"Investors will have to make two decisions: one is if they want to continue to hold both stocks," Claudio Aspesi, an analyst at Sanford C. Bernstein, told Bloomberg. "With the de-merger, SFR becomes a potentially attractive acquisition target, so I think that probably the share price will have upside. And on the other side, on the media side obviously investors will be most focused what happens for divestitures."

The supervisory board also confirmed Vincent Bolloré as the future supervisory board chairman of Vivendi in its new guise as an international content and media concern. He replaces Jean-Rene Fourtou. Arnaud de Puyfontaine, currently CEO of Hearst Magazines UK, has been appointed as senior executive vice president in charge of Vivendi's media and content activities with effect from early 2014.

Until the completion of the demerger plan, Vivendi's management board, chaired by Jean-François Dubos, will be composed of Jean-Yves Charlier, chairman and CEO of SFR, and Arnaud de Puyfontaine.

Vivendi has been pursuing a strategy to rid itself of its troublesome telecoms assets and focus on its media business, and recently agreed the sale of its 53 per cent stake in Maroc Telecom to Etisalat for €4.2 billion ($5.65 billion) in cash. In July, Vivendi also announced the sale of its controlling stake in video games maker Activision Blizzard.

For more:
- see this Bloomberg article
- see this Reuters article

Related Articles:
Vivendi targets mid-2014 for SFR split
Vivendi to sell Maroc Telecom stake to Etisalat for €4.2B
Vivendi's telecoms exit plan hits a speed bump
SFR shows some glimmers of hope as turnaround continues
Vivendi considers casting SFR adrift as part of group split

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