Vivendi’s supervisory board has approved a previously-announced plan to demerge mobile operator SFR from the rest of the company.
This is expected to pave the way for an IPO of SFR in 2014, a process led by Citigroup and Societe Generale,…
Vivendi’s supervisory board has approved a previously-announced plan to demerge mobile operator SFR from the rest of the company.
This is expected to pave the way for an IPO of SFR in 2014, a process led by Citigroup and Societe Generale, TelecomFinance reported previously.
The demerger could take the form of a distribution of SFR shares to Vivendi shareholders, the group said. “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,” it commented.
The plan will be put to shareholders at the next AGM at the end of June next year.
A demerger will be another step for Vivendi to focus on its media operations, which include Canal+, recently bought out from Lagardere, as well as Universal and Brazilian operator GVT. Meanwhile, it has sold its 85% stake in videogame maker Activision Blizzard and its 53% interest in Maroc Telecom.
Hiving off France’s second-largest mobile operator into a separate entity will also remove the operator’s debt from Vivendi’s balance sheet. In the face of a price war in the French wireless market, SFR has seen its revenues decline steadily. For the first nine months of 2013, they were down 10.5% to €7.6bn (US$10.3bn) compared to the same period last year.
Vivendi’s net debt stood at €7.9bn (US$9.8bn) as of 30 September, compared with €17.4bn (US$23.6bn) three months before.
It has been speculated that following the demerger, SFR could become an acquisition target, with several strategic players reportedly interested. These include cableco Numericable and rival operator Bouygues.
In a video interview with French newspaper Les Echos yesterday, the CEO of incumbent Orange, Stephane Richard, said that the size of the French market did not justify four operators.
He added that the potential network sharing between SFR and Bouygues, discussed earlier this year, would be “a form of consolidation”.
Richard however stressed he is not considering a similar move with new entrant Free Mobile, despite the two companies having a 3G roaming agreement in place.
Bollore set to be new chairman
Following the demerger, French businessman and Vivendi’s largest shareholder Vincent Bollore will become the conglomerate’s new chairman of the supervisory board.
He will replace Jean-Rene Fourtou, who previously announced plans to step down once the SFR spinoff is completed.
In September, Bollore had floated his own name as a Vivendi CEO candidate following clashes with Fourtou over the future of the company.
Bollore later agreed to pull out in exchange for his appointment as vice chairman and Fourtou agreeing to resign by mid-2014.
Arnaud de Puyfontaine will join the supervisory board in early 2014 as senior VP in charge of Vivendi’s media and content activities. He is currently CEO of Hearst Magazines UK.
Vivendi’s management board remains chaired by Jean-Francois Dubos while Jean-Yves Charlier is the chairman and CEO of SFR.
