Vivendi Biding Time on Brazil, Morocco Asset Disposals

Vivendi SA (VIV), the French company seeking buyers for telecommunications assets to refocus on media businesses, will bide its time on divesting the phone divisions in Brazil and Morocco.

GVT in Brazil and Maroc Telecom SA (IAM) both reported increases in 2012 earnings before interest, taxes, depreciation and amortization, excluding currency fluctuations, and that trend will probably continue, making it more difficult for Vivendi to accept a lesser offer, Chief Financial Officer Philippe Capron said after a press conference in Paris.

While “ideally we should dispose of one of the two this year,” Capron said today, “we don’t have a knife on the throat and therefore a fire sale doesn’t make sense.”

Vivendi, whose assets include record company Universal Music Group, video-game maker Activision Blizzard Inc. (ATVI), pay- television business Canal+ as well as phone companies in France, Brazil and Morocco, is studying options for its structure. Its French mobile-phone unit SFR posted a fourth-quarter loss before some items as call prices dropped, while revenue from TV, gaming and music assets rose.

The company didn’t give a group-wide forecast, saying it’s waiting on the results of a strategic review and that all units met their 2012 objectives. Net debt came to 13.4 billion euros ($17.5 billion), less than the expected 14 billion euros, also making it easier to wait for better offers, Capron said.

GVT Value

Vivendi is seeking 8 billion euros for GVT, with DirecTV (DTV) among parties that have expressed interested, people with knowledge of the talks have said.

The French company’s stake in Maroc Telecom so far has attracted interest from Emirates Telecommunications Corp. (ETISALAT), the carrier also known as Etisalat, Qatar Telecom QSC and Korea’s KT Corp. (030200) Vivendi’s 53 percent stake in the carrier has a market value of about $5.8 billion.

Should Vivendi wait too long to sell assets, “investors will progressively lose faith,” Sanford C. Bernstein analyst Claudio Aspesi said by phone. “It’s not clear why you’ll get a much better price next year than today.’

Vivendi reported a fourth-quarter net loss of 1.5 billion euros, hurt by impairment costs at Canal+ France, for music catalogs at Universal Music, as well as money set aside after losing a lawsuit filed by Liberty Media Corp. (LMCA)

Lagardere Suit

Vivendi is also in a legal battle with Lagardere SCA (MMB) over jointly owned Canal+ France, a unit of Vivendi’s Canal+ Group. Lagardere, which holds 20 percent of Canal+ France, sued its partner this month. Capron said today Vivendi feels ‘‘legally very strong” in fighting the suit.

Sales rose 0.6 percent last year to 29 billion euros, Vivendi said today. Analysts had projected 28.5 billion euros, the average of estimate compiled by Bloomberg. Vivendi will pay a dividend of 1 euro a share.

The stock closed down 1.8 percent at 15.67 euros in Paris. It has dropped 7.6 percent this year through today.

SFR posted a fourth-quarter loss of 50 million euros, excluding interest, taxes and amortization, compared with profit a year earlier. Revenue fell 8.7 percent as the carrier reduced prices to fend off competitors. SFR’s Ebitda will probably drop to “close to” 2.9 billion euros this year from 3.3 billion euros in 2012.

“SFR is not for sale,” interim Chief Executive Officer Jean-Francois Dubos reiterated today. The board’s immediate plan for the company is to maximize SFR’s value and continue Vivendi’s media and content growth, he said.

To contact the reporter on this story: Heather Smith in Paris at hsmith26@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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