Vivendi Approves Telecom Spin-Off, Vincent Bollore to Become Chairman
After the separation of telecom arm SFR, the conglomerate's largest shareholder will be chair of the company that will then focus on its media assets.
PARIS – After months of discussion, Vivendi said Tuesday that its board has approved a planned split and that Vincent Bollore would take over as chairman of the French media giant next year.
In a statement Tuesday evening French time, the company announced that Bollore, the group’s largest shareholder, would take the reigns of the company after Vivendi spins off its remaining telecom holding, SFR. Bollore’s appointment will become effective after the company’s general meeting next June where shareholders must approve the separation.
Bollore, who holds 5 percent of the company’s stock, will replace Jean-Rene Fourtou, who will leave the company after 11 years.
The statement confirmed the company’s plans to focus on becoming a media company, with Universal Music Group as the main gem in its content crown, along with French pay TV firm Canal Plus.
The split echoes similar moves by Hollywood giants, which have focused on core entertainment businesses. For example, Rupert Murdoch's empire midyear split into entertainment firm 21st Century Fox and publishing firm News Corp, while Time Warner is in the process of spinning off magazine division Time Inc. after previously separating AOL and Time Warner Cable. Plus, CBS Corp. is looking to spin off its outdoor business.
“Vivendi aims to become an international media group, bringing together strong brands in the production and distribution of original content," the company said Tuesday. "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."
Current Hearst Magazines International executive vp Arnaud de Puyfontaine will also join the newly streamlined Vivendi as senior vp of media and content in early 2014 to focus on growing the company's media properties, as well as creating a new digital strategy for the company, Vivendi said.
"Given the three main units of Vivendi – Canal Plus, music and [Brazilian broadband firm] GVT – are run by industry heavyweights, our view is he will be more of an overseer than an active manager," said Liberum Capital analyst Ian Whittaker.
He predicted upside for the stock. "With the de-merger now confirmed, we expect Vivendi to re-rate as investors become more aware of the potential upside and the market realizes the valuation disconnect that Vivendi is valued like a telco," he said.