After selling the bulk of its stake in Activision, is SFR the next to go for Vivendi?

Jul 31, 2013
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After selling 85% of their stake in Activision last week, Les Echos reported that Vivendi is studying the possibility of selling SFR, its largest telecoms operation. Given their debt challenges and shaky performance of late, they’re particularly looking at how to divest the French telco without disrupting their stock price or negatively affecting their (already depressed) credit rating.  They’re hoping, of course, that a potential sale would restore the market’s confidence in their stock, ultimately lifting it from its recent lows. To reiterate their optimism, their Finance director stressed in an analyst call late last week, that Vivendi’s management believes that a SFR divestiture would likely “create value” (presumably for shareholders).

As mentioned in our earlier article about their decision to sell their stake in Activision, they’re still in talks to sell their stake in Maroc Telecom. In addition, after suspending the sale of their Brazilian operator GVT due to the low bids they received, they may be relaunching the search for a buyer. So, it looks like when they stated that they plan to refocus on entertainment activities, such as Universal Music Group and Canal +, they apparently meant it. If these transactions go through and enable them to clear their debts and free up more cash, it will be interesting to see what they’ll do to reinforce their leadership in music and TV content, particularly vis-a-vis leading rivals such as Disney. Having started off as water company Compagnie Générale des Eaux in the 1800s, Vivendi has undergone a dizzying transformation in recent years into a media giant. A possible sale of their telco assets looks to be yet another big step in their transformation.