?Vivendi Media Strategy, Possible Deals in Focus Ahead of Annual Meeting

Vincent Bollore Headshot - P 2013
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Vincent Bollore Headshot - P 2013

After recent divestitures, the conglomerate has a cash war chest that incoming chairman Vincent Bollore could use for acquisitions, analysts say.

LONDON – While French media and telecom conglomerate Vivendi has highlighted its future focus on media and entertainment businesses, ‎the company has yet to outline a more detailed vision.

Some analysts hope for some insights Tuesday during Vivendi's annual shareholder meeting in Paris.

It marks the official handover from the old management guard to new chairman Vincent Bollore who owns a 5 percent stake in the company.

After shedding its stakes in Maroc Telecom and video game firm Activision Blizzard, Vivendi has also focused on selling its French telecom arm SFR and merging it with Altice's cable arm Numericable.

Its divestitures have left it with a cash war chest of around $13.5 billion, which analysts predict the firm could use for dividend payments, other purposes and acquisitions. However, not all are convinced that any takeover target would naturally fit with the current businesses, which are pay TV firm Canal Plus, global music giant Universal Music Group and Brazilian broadband firm GVT.

"Nothing in media has synergies with the current portfolio," Sanford C. Bernstein analyst Claudio Aspesi said in a recent report. The recent disposals leave a "media-only strategy confused and shrunk," he said. "A France-only strategy could be more attractive."

With Vivendi having decided to focus on media and entertainment assets, analysts say investors are looking for some management signals about future deal and strategic plans on Tuesday.

"We expect the new management team to give an update on the future strategic direction of Vivendi the annual general meeting," said UBS analyst Polo Tang.

Reuters reported that Vivendi is most likely to look for M&A in areas adjacent to Canal Plus and maybe Universal Music. It quoted bankers as citing such U.S. TV assets as AMC Networks, Starz and Scripps Networks Interactive, and maybe even a film studio such as Lionsgate as possibly being of interest to Vivendi.

They also mentioned European content producers, sports and live events/concerts firms as possible targets Vivendi may consider.

Reuters also cited pay TV assets, such as Turkey's Digiturk or OSN in Africa, as possible targets.

Reuters suggested that incoming chairman Bollore would determine the future strategy, but has been keeping his views private, even to insiders. But Reuters said he is believed to be more interested in a "transformational" big acquisition than a slew of smaller deals.

Analysts expect no dealmaking to happen before late 2014 or beyond when the sale of SFR is completed.

A Vivendi spokesman declined to comment.

E-mail: Georg.Szalai@THR.com
Twitter: @georgszalai