* Activision, Maroc Telecom seen as sale candidates
* News Corp style split seen possible, bad for debt holders
* SFR future in doubt after Combes withdrawal
* Bollore future role eyed
By Christian Plumb and Gwénaëlle Barzic
PARIS, June 29 Just three months ago Vivendi's
veteran chief executive Jean-Bernard Levy, under fire
for a slumping stock price, said asset sales were "not taboo".
Now that he's quit, the group could be looking at a more
dramatic shakeup than he could have imagined.
Video game maker Activision Blizzard and Maroc
Telecom head up the list of candidates for sale,
analysts and bankers said, but his successors could now mull a
Murdoch-style split or even the sale of the SFR telecoms unit
which Vivendi grabbed control of just a year ago.
"I have the impression that all options are open with the
exception of a full split of the group, which seems less
likely," said one Paris-based banker. "But certainly asset sales
Vivendi, whose debt burden soared by roughly a third last
year to 12 billion euros ($14.91 billion), has seen its stock
price slump some 13 percent this year on growing concern about
competition faced by its long-time cash cow, French telecoms
The company, which also controls assets including Universal
Music Group and Brazilian telecoms operator GVT, provided few
clues as to the strategic differences that divided Levy, who is
quitting after nearly a decade, and the company's board.
But there seemed little doubt that Levy had stood for
keeping intact most of the empire that he had built, while the
board was eager to look at ways to boost the company's stock
price and slash debt.
While speculation swirled around Activision, in which the
company owns a 60 percent stake, the possibility of a split of
the group into media and telecom assets, echoing News Corp's
similar move announced earlier this week, could not be
ruled out, analysts at Liberum Capital said in a note.
They also said SFR itself could go on the block, which would
constitute a huge about-face just a year after the group bet big
on the French telecoms business, spending 7.75 billion euros to
assume full control of it from Vodafone.
Sources said on Thursday that Vodafone European head Michel
Combes, who had been set to take the reins at SFR, would no
longer make the switch, boosting uncertainty about the future of
the unit, which is struggling with competition from upstart
Vivendi shares, which jumped on Thursday, were up 1.7
percent at 1201 GMT, about in line with the European media
sector as investors tried to assess the difficulties of
an overhaul given that the company now has two executive
positions vacant - CEO and the head of SFR.
"With what's going on with the company, we can think that
there will be significant changes in the outline of the group, a
major modification to this conglomerate," said Yohan Salleron, a
fund manager at Mandarine Gestion in Paris. "But it seems too
early to buy in the sense that we have no idea what's going to
happen. You don't even know what you're buying at this point."
Still, Levy's exit was greeted by various analyst upgrades
on optimism that group Chairman Jean-Rene Fourtou would now move
to make shareholder returns his priority, especially with the
imminent return to the board of longtime activist investor
"Given his background, we would view his arrival as a
positive given his reputation for accelerating value creation
via asset sales or cost-cutting," Jefferies analyst Will Smith
said in a research note, speculating that Activision and Maroc
Telecom, the largest telecom operator in Morocco, could
Liberum Capital's Ian Whittaker, said he viewed SFR itself
as a sales candidate, acknowledging that such a move "might seem
odd" given that SFR is expected to produce 38 percent of the
group's profits in 2012.
Mexican tycoon Carlos Slim, who has been on the acquisition
trail in Europe, boosting his stake in Dutch telecom KPN
, could be a candidate to buy it, he said.
Vivendi is under pressure not just from disappointed
shareholders but also from bondholders who have become
increasingly worried about its growing debt, likely to be
exercerbated by a U.S. jury's demand that it pay Liberty Media
Corp $954.6 million in damages.
While some analysts have said a Murdoch-style split of the
group could unlock value, one at Exane BNP Paribas said last
month that such a move "would aggravate, not solve the debt
issue, unless there is complex financial engineering".
Vivendi, rated in the mid-triple B area, has ten
euro-denominated bonds outstanding, the majority of which mature
over the next five years.
The group's five-year credit default swap level is currently
at around 215bp, having risen by around 6bp or 3 percent on
Friday morning. It stood at around 170bp at the beginning of the