* Board votes to study split of telecom, media assets
* Biggest shareholder Bollore named board vice-chairman
* Decision on split to be made by early 2014
* Vote on split may take place at 2014 shareholder meeting
* Bollore says split has his 'total support'
By Leila Abboud and Christian Plumb
PARIS, Sept 11 Vivendi said it aimed to
decide early next year on whether to spin off its struggling
French telecoms unit SFR as the once-sprawling conglomerate
seeks to remake itself as a media group focused on music and
Vivendi set the deadline for a decision on a split between
media and telecoms and also named its largest shareholder
Vincent Bollore as vice-chairman of its board in a bid to defuse
a boardroom row.
The French conglomerate is selling most of its Maroc Telecom
and Activision video game businesses as part of a
broader overhaul, though Bollore said in a newspaper interview
that no further asset sales were being considered.
"I think the demerger is an attractive project and it has my
total support," Bollore told business daily Les Echos, adding
that he would remain a shareholder in the two companies after
Bollore, a French corporate raider and industrialist,
clashed with Vivendi's powerful chairman Jean-Rene Fourtou over
naming a new CEO, as he sought more influence over its future.
Bollore even floated his own name as a CEO candidate before
pulling out on Wednesday in exchange for an agreement that
Fourtou would step aside as chairman by summer 2014, people
familiar with the situation earlier said.
Vivendi has now made Bollore the official number two on the
board, putting him in line to take over when Fourtou leaves. The
announcement, along with Bollore's comments, may put to rest
some concern among investors that Bollore did not agree with
Fourtou's plan to split up the company.
Bollore told the paper the group was not searching for a new
chief executive and also denied that he planned to merge
advertising agency Havas into the new Vivendi media company, a
scenario often mooted by analysts and the press. Bollore owns
36.5 percent of Havas.
"The team will remain the same," he said. "The split-up of
the company will create two structures and today we need to
prepare two teams."
Investors have shown little enthusiasm for Vivendi's stock,
sending it 1.5 percent lower this year even as France's
benchmark CAC40 index has gained 13 percent. Still, at
least one analyst said the agreement to proceed with a split
looked like a step in the right direction.
"If they feel SFR's not ready for a split they could always
back out of it," said Kepler Cheuvreux analyst Conor O'Shea.
"But there's certainly tangible progress here in the whole
portfolio restructuring situation."
SFR's earnings before interest tax and depreciation have
been falling since 2010. The split that Vivendi is envisaging
would leave SFR, the second-biggest telecom operator in France,
an independent company to compete with Orange and
The media company would include Universal Music Group and
pay-TV provider Canal Plus to create "a new international media
group based in France."
Before such a split could be done, Vivendi would have to pay
down its debt pile using the proceeds from the sales of its
video games maker Activision Blizzard and Maroc Telecom. Taking
into account disposals, Vivendi's net debt will drop to 6.5
billion euros from 17.4 billion euros as of June 30, the company
said last month.
The company said the split "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."
FNAC PARALLEL CITED
But there remain doubts about how attractive SFR will be on
its own, with some raising parallels with French books, records
and electronics retailer Fnac, whose shares tumbled
after it was spun off from luxury goods group Kering -
formerly called PPR - earlier this year.
"This means the focus will be on how to get SFR into better
shape (earnings to bottom out in 2014) so that you can put
forward a split, to create an attractive Vivendi Telco entity
and avoid a repeat of the Fnac situation post-spin-off from
PPR," O'Shea said. "This is especially necessary as it is
commonly believed, rightly or wrongly, that Bollore is unlikely
to be a natural long-term holder of SFR."