SFR demerger backed by Vivendi board

SFR demerger backed by Vivendi board

27 NOV 2013

The board of media conglomerate Vivendi has confirmed a demerger of SFR, after months of speculation about the future of the French operator.

Vivendi’s supervisory board unanimously backed the split between its telecoms and media interests, which followed a study launched by the company on 11 September.

Reuters reported in October that Vivendi hired Generale and Citigroup as lead banks for the SFR listing. Today’s announcement does not identify the banks chosen for the listing.

According to the company, the demerger could take the form of a distribution of SFR shares to Vivendi shareholders. Shareholders would then have the opportunity to invest in two separate businesses listed on the stock market.

This plan will be submitted to the relevant regulators and the board aims to discuss it at the next annual shareholders’ meeting in June 2014.

Vivendi is moving away from telecoms to focus more on its media businesses which include Universal Music Group and French pay TV company Canal Plus. Significant debts have previously limited its ability to spin-off assets without the risk of credit downgrades.

“This group would fully respond to the new ways of consuming digital media in music and video, and would pursue its development in fast-growing markets,” noted a company statement.

Vivendi saw its third-quarter performance dragged down by SFR as it was affected by price wars and regulatory pressure. France’s number two operator saw its revenue fall by 8.7 per cent year-on-year, to €2.5 billion. The poor SFR performance offset growth at Vivendi’s media holdings.

Vivendi management also talked up progress on a listing of SFR. “Achieving an independent listing for SFR will be beneficial to our shareholders by removing the conglomerate discount and revealing true value and growth potential of our media businesses,” CFO Phillipe Capron told Reuters.

As part of its move away from telecoms, Vivendi agreed to sell its 53 per cent stake in Maroc Telecom to Etisalat for €4.2 billion at the beginning of November.

Vincent Bollore will replace Jean-Rene Fourtou as chairman of Vivendi after the split has been completed.

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Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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