Vodafone’s Combes Left in Limbo After Vivendi Job Goess
Vodafone Group Plc (VOD)’s Michel Combes, who was due to take over Vivendi’s SFR phone unit, decided not to proceed with a move because Levy’s removal reduced his chances of becoming CEO in the future, according to three people who were briefed after the discussions. They asked not to be identified because the matter is not public.
Vivendi yesterday named head of personnel Stephane Roussel as new SFR chief and said Levy will step down following strategy differences with the board. Combes, 50, who had agreed to take the SFR position starting Aug. 1, will now stay on at Vodafone until a reorganization at the U.K. company takes effect in the fourth quarter, said a person with knowledge of the matter.
Jean-Rene Fourtou, who has chaired Paris-based Vivendi since 2002, is eager to de-emphasize its telecommunications businesses, which he believes require too much investment to be successful and lack scale, the people said. That orientation also discouraged Combes, whose background is in the industry, they said.
Combes asked Fourtou if he could take on the top role, succeeding Levy, and his request was rejected, according to the people. The French-born executive had agreed to join SFR on the understanding that the role would lead to an eventual appointment as Vivendi CEO, they said.
“The SFR role is utterly critical to Vivendi,” Will Draper, an analyst at Espirito Santo in London, said today. “The stage was set for Combes to pick up SFR at a low, clear the decks, and preside over its improvement.”
A Vodafone official declined to comment. Vivendi representatives didn’t immediately return a phone call and an e- mail seeking comment.
Levy left after seven years at the helm following disagreements with Fourtou over his resistance to turnaround scenarios, including major asset sales or a breakup. Combes’s existing role at Vodafone as chief of its European division was eliminated yesterday, after the world’s second-largest mobile phone company agreed to split the region into two units and appointed two managers to replace him.
Vivendi yesterday jumped as much as 7.5 percent on the Paris exchange after Bloomberg News reported that Levy was preparing to step down. The company confirmed Levy’s departure late yesterday. The stock rose 3.1 percent to 14.63 euros today, the highest level since Feb. 29.
Levy, 57, was criticized by shareholders for failing to tackle the low valuation of the owner of Universal Music Group and phone divisions in France, Morocco and Brazil. Vivendi has been considering an overhaul of its structure, including a possible sale of video-game publisher Activision Blizzard Inc. (ATVI) and a spinoff of pay-TV unit Canal Plus, people familiar with the matter have said.
Combes, who was recruited by Vodafone’s Vittorio Colao when he took over as CEO in 2008, has also held positions at France Telecom SA (FTE) and French mobile-phone tower company TDF.
He was due to bring “strategic vision” to SFR, which needs to respond to new competitor Iliad SA (ILD), Levy said in May. SFR is looking for ways to stop consumers from subscribing to Iliad’s discounted packages, which started selling in January. The company said it will follow price cuts by reducing expenses.
SFR, which accounted for 41 percent of Vivendi’s sales in the first quarter, has looked to cut costs by stopping unpopular product lines as well as reducing network, computer and call- center spending.
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