Jean-Bernard Levy, Chief Executive Officer of Vivendi, the largest media and telecommunications company in Europe, resigned in the context of conflict with the executive board of the French group strategy, paving the way for a possible reorganization, writes Bloomberg. Levy’s departure (57 years old), head of Vivendi for seven years, comes after several months of tension between him and Jean-Rene Fourtou, chairman of the board since 2002, according to sources close to the situation. Disagreements between the two have revolved around opposition from Levy to various measures to revive the share price, including sale of major assets or division of the company. Tensions were heightened last weekend, during a meeting of the board, said the sources cited.
Fourtou, together with interim general manager Jean-Francois Dubos, must now find ways to push up the share price of Vivendi, which reached in April the minimum of nine years. Their decisions could affect critical operations such as SFR, the second telecom operator in France, or Activision Blizzard, the largest video game producer in the world, both part of the Vivendi group. “In the last 12 months, investors (…) have not been satisfied. It is unclear why there should be Vivendi, as company, and there are arguments for the sale of all assets. However, this strategy takes time and generates a certain degree of risk” comments for Bloomberg an analyst at Sanford C. Bernstein in London.
Vivendi shares rose 3.5% Friday in Paris, after an advance of 5.5% on Thursday when Bloomberg reported that Levy is getting ready to resign. The shares are down 13% since the beginning of the year, with a market capitalization of only 18.3 billion euros, for a company that controls Universal Music Group, SFR, Activision Blizzard, Canal Plus and other leading companies in France, Morocco and Brazil.
JPMorgan Chase and Nomura analysts have improved recommendations and target prices for Vivendi shares. Another giant of the media industry, News Corp., controlled by billionaire Rupert Murdoch, bowed to pressure and announced that shareholders will separate the businesses into two companies, an entertainment company and a publishing one. Group shares jumped 11% Tuesday and Wednesday.
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