REFILE-Vivendi again working to hive off telecoms unit SFR -report

Tue Jul 9, 2013 6:47am EDT

PARIS, July 9 (Reuters) - Vivendi is again working on hiving off its largest unit, French mobile and fixed operator SFR, according to a report in Les Echos newspaper, as it seeks to reduce exposure to telecoms to concentrate on media businesses.

The French conglomerate is more than a year into a strategy review that has included attempted asset sales, including the ongoing sale of Maroc Telecom and the failed auction of Brazilian telecom unit GVT.

It sees its telecom units as too capital intensive and low growth, so prefers to develop its pay-TV, music and video games activities.

A spin-off of SFR was one of the possibilities Vivendi considered a year ago before putting it aside and it has resurfaced in media reports several times since.

At Vivendi's annual meeting in late April, Chairman Jean-Rene Fourtou said finding the best strategy for SFR was a priority and that a public listing of the unit was also an option.

According to Les Echos, if Vivendi completes the sale of Maroc Telecom by year end, it would then begin to work on the split with an aim to carry it out by the middle of next year.

SFR would become a separate company, while GVT, Universal Music Group, video games maker Activision Blizzard and pay-TV provider Canal Plus would be in the new Vivendi media, the newspaper said. Vivendi could later seek to revive the sale of GVT, Les Echos added.

Nevertheless, tricky details about how to divide Vivendi's debt between SFR and Vivendi media remain as well as the matter of getting shareholder support for the split in which current Vivendi shareholders would likely be given shares in both new companies.

A spokesman for Vivendi declined to comment on Tuesday.

SFR is France's second biggest mobile operator. Like its larger rival Orange and smaller Bouygues Telecom , it has struggled since low-cost competitor Iliad entered the French mobile market in January 2012.

SFR is expecting a 12 percent drop in its earnings before interest, tax, depreciation and amortisation (EBITDA) this year to 2.9 billion euros ($3.80 billion).

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