Vivendi considers casting SFR adrift as part of group split

Vivendi's strategy to rid itself of telecoms assets and sharpen its focus on media gained further momentum on Friday when the French group first announced a deal to sell most of its stake in videogame publisher Activision Blizzard. Vivendi also said it is studying a split of the company that would see French telecoms group SFR separated from the rest of the group.

"The SFR split-off is a possibility that the board will consider in due time," CFO Philippe Capron told reporters on a conference call, according to Reuters. "We are presently looking at the option, and conducting a feasibility study on it."

The conference call was held to discuss Vivendi's earlier announcement that it plans to sell most of its stake in U.S.-based Activision Blizzard to the video game maker and a group led by CEO Bobby Kotick for $8.17 billion (€6.15 billion). This is the Vivendi's second massive deal in a week after it agreed to sell its 53 per cent stake in Maroc Telecom to Etisalat for €4.2 billion.

In other words, the 18-month-old Vivendi strategy to turn itself into a media-only company looks finally to be taking shape. This will also help to establish a future plan for SFR, which is in the process of stabilizing its business in France following a fierce mobile price war sparked by Iliad's Free Mobile.

At the same time, while SFR, Maroc Telecom and Brazilian broadband provider GVT may be clear targets for disposal, Activision Blizzard, which operates a profitable media and content business, seems a less obvious sale and has caused some head scratching among analysts, Reuters said.

A Vivendi spokesman told Reuters that the company still saw its future in media given its ownership of Universal Music Group and pay-TV unit Canal Plus. "Our focus will be around music, television, cinema and entertainment, and we want to have a 100 percent ownership of our subsidiaries," the spokesman said.

Other analysts have broadly welcomed the deal as good for all parties involved.

"This looks like a win, win, win for Activision, Vivendi and Activision shareholders," Colin Sebastian, an analyst at Robert Baird & Co., told Bloomberg. "It's a better outcome than a special dividend to Vivendi, and I expect Activision will function even better as an independent company without the overhang of a struggling parent."

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

Related Articles:
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Etisalat now sole bidder for Maroc Telecom as Ooredoo backs out
Vivendi turns spotlight on SFR, sees Maroc Telecom deal by autumn
Etisalat, Ooredoo vie over Vivendi's Maroc Telecom stake
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