Vivendi studying SFR spinoff

French media and telecoms conglomerate Vivendi has said it will decide early next year whether to separate its mobile unit SFR from the rest of the group.
The demerger would see the company split into separate entities: on the one side, an international…

French media and telecoms conglomerate Vivendi has said it will decide early next year whether to separate its mobile unit SFR from the rest of the group.

The demerger would see the company split into separate entities: on the one side, an international media group focused on music, cinema, internet and pay-TV; on the other side the French mobile carrier SFR.

A final decision on the demerger is expected to be made in early 2014 and the proposal later submitted to a shareholders’ meeting. If approved, the separation “would create significant value to shareholders as they would have the opportunity to invest in two clearly differentiated vehicles evaluated according to the specifics of their respective sectors”, Vivendi said in a statement.

Rumours of an SFR spinoff or potential IPO have been circulating for a while as the mobile player has seen its revenues decline steadily in the face of a price war in the French wireless market. Hiving off SFR into a separate entity would remove the operator’s debt from Vivendi’s balance sheet.

Vivendi is also in the process of offloading its majority Maroc Telecom stake for €4.2bn and recently sold video game publisher Activision Blizzard for US$8.2bn, in a further effort to focus on its media operations and cut its debt load estimated at €17.4bn as of 30 June.

Meanwhile, the conglomerate said that chairman Jean-Rene Fourtou has proposed the appointment of French businessman and Vivendi director Vincent Bollore as vice chairman.

The company’s largest shareholder, with a 5% stake, Bollore reportedly floated his own name as a Vivendi CEO candidate a few days ago following clashes with Fourtou over the future of the company.

Bollore later pulled out but in exchange for his appointment as vice chairman, Fourtou has agreed to resign as chairman by mid-2014, according to Reuters citing people familiar with the matter.