UPDATE: Vivendi Gets NBCU Money; SFR Deal Moves Closer
January 26 2011 - 5:25AM
Dow Jones News
Media giant Vivendi SA (VIV.FR) Wednesday said it has now
received all of the money from the sale of its stake in NBC
Universal, a move expected to kick-start talks to buy out Vodafone
Group PLC's (VOD) minority holding in French telecom operator
SFR.
Vivendi said it has now received the total of $5.8 billion in
cash from the sale of the 20% stake in NBCU, after a three-way deal
with current NBCU owner General Electric Co. (GE) and Comcast Corp.
(CMCSA) received regulatory approval last week.
"We are very satisfied that our strategic objective to exit NBC
Universal has been completed...Vivendi now has control of all its
assets and is fully focused on pursuing its profitable growth
strategy," Vivendi Chief Executive Jean-Bernard Levy said in a
statement.
Vivendi has repeatedly said that it is only waiting to receive
the full proceeds from the sale of NBCU to start talks to buy
Vodafone's 44% SFR stake, which analysts value at between EUR7
billion and EUR8 billion. Vodafone, meanwhile, is looking to sell
its stakes in companies over which it has no management control in
a bid to unlock value from its sprawling global operations.
A Vivendi spokesman declined to comment when asked if Vivendi
had started talks with Vodafone or if this means talks could start
soon.
The Vivendi spokesman referred to CEO Levy's comments from
November last year, when he told an audience of investors that
Vivendi aimed to buy out SFR sometime in 2011, and would only start
talks with Vodafone once it had the NBCU money.
A Vodafone spokesman declined to comment on the issue.
For Vivendi, buying out minorities takes priority over making
large new acquisitions, as the group looks to tighten the focus on
its existing businesses and simplify its holding structure.
Owning all of SFR, France's second-largest telecoms operator,
would give Vivendi access to more cash, which could lead to a
higher dividend in the future.
Having full control of SFR's cash could also help Vivendi
finance future growth at recently acquired Brazilian telecom
operator GVT and could create operating synergies with Vivendi's
pay-TV unit Canal Plus, analysts say.
With the NBCU proceeds and the receipt earlier this month of a
EUR1.25 billion settlement of a long-running dispute in Poland,
analysts have grown increasingly confident that Vivendi has the
means to not only buy out SFR but also minorities in pay-TV
operator Canal Plus, all without jeopardizing its credit
ratings.
"With the EUR1.25 billion in [Polish mobile phone company] PTC
proceeds we calculate Vivendi can buy both minority stakes and
still be able to maintain its BBB/Baa2 credit rating meaning it
would not need a capital raising," UBS said in a note to
investors.
Meanwhile Vodafone, the world's biggest mobile operator by
revenue, last September restructured its divisions, placing all the
minority stakes it holds in other companies into a single,
separately managed unit. In addition to its SFR stake, Vodafone
wants to sell its 24.4% stake in Polish mobile operator Polkomtel
SA.
Late last year, Vodafone sold its interests in Softbank Corp.
(9984.TO) of Japan for GBP3.1 billion, and it September it sold its
3.2% stake in China Mobile Ltd. (CHL) for GBP4.3 billion before tax
and transaction costs after which it launched a share buyback
program.
At 0951 GMT Wednesday, Vodafone shares were up 4 pence, or 2.5%,
at 184 pence, the third-highest riser on the FTSE 100, boosted by
Verizon Wireless's results in the U.S. Tuesday. Verizon
Wireless--which is 45% owned by Vodafone and 55% owned by Verizon
Communications (VZ)--hasn't paid a dividend since 2005. Vodafone
CEO Vittorio Colao said in November he expects "something to
happen" in relation to Verizon Wireless by the end of this
year.
Vivendi rose 0.9% to EUR22.01, in line with a higher Paris
market.
-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54;
ruth.bender@dowjones.com
(Lilly Vitorovich in London contributed to this article.)