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Vivendi Considers Splitting Into Two Companies

Investors have complained that its shares are undervalued


vivendi185France’s Vivendi announced on Wednesday that it will begin a formal assessment of ways to spin off its SFR telecommunications unit.

The company will also reorganize itself, tapping Vincent Bollore, a major stakeholder, as its new deputy chairman. Bollore told a French newspaper that Vivendi’s board had become convinced that there were “no synergies” between its telephone business and media divisions and that its unwieldy structure was “dragging down” the company, Bloomberg noted.

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Bollore added that splitting the telecommunication business from the Vivendi’s media holdings was an “attractive plan” that had his backing. A final decision on the spinoff of the telephone unit could come early next years. Shareholders would still have to approve any plan to split up the company.

After the split, Vivendi would retain its Brazilian Internet, global music, subscription TV and European movie house businesses.

The decision to study a spinoff comes after years of shareholder complaints that Vivendi shares trade far below the value of its assets. The company has moved over the last year to sell off some assets and last year its chairman promised to restructure the business.

Vivendi’s possible split echoes a similar move by News Corp. (NWSA), which separated its broadcast media and publishing businesses earlier this year.

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