Lévy Steps Down At Vivendi

Vivendi chief exec Jean-Bernard Lévy is leaving his post after a disagreement about the Paris-based multimedia giant’s strategic direction.

His departure after 10 years in the hot seat comes came within days of a meeting of Vivendi’s supervisory and management boards, followed by a brief statement that the company wouldn’t comment on what was discussed until “as and when appropriate.”

Newspapers on both sides of the Atlantic reckoned the meeting, which the Financial Times described as being “like the G8 of Vivendi,” was to thrash out whether the company should look at splitting itself or selling off a few assets.

Although those assets include Universal Music, which is trying to get regulatory approval for the $1.9 billion purchase of EMI’s recorded music business, leading video game publisher Activision Blizzard, pay-TV firm Canal+ and multinational telecoms giant SFR, leading business papers such as FT say Vivendi’s capital value is “much less than the sum of its parts.”

Shareholders are restless because the stock price is down 25 percent over the last 12 months, although news of Lévy’s departure saw the share price perk up by about4 percent to euro 14.48.

Bernstein Research analyst Claudio Aspesi recently suggested that a full breakup of the company – splitting the telecoms and entertainment divisions – could more than double the value of Vivendi’s stock.

Lévy’s departure followed a meeting of the supervisory board June 28 and was announced in a brief statement that thanked him for his “contribution over the last ten years.”

Such a high-level departure suggests a fundamental division over Vivendi’s future has polarised into a clash between Lévy and long serving chairman Jean-Rene Fourtou.

The outgoing chief exec joined the company in that role in 2002, when the former French water utility’s acquisition strategy had saddled it with debts of around $19 billion.

He oversaw the sale of Hollywood studio Universal Pictures, while making successful long-term investments such as buying control of Activision, which produces the hit Call Of Duty” series and has become the world’s leading computer games developer.

Lévy’s also had to steady the ship in the face of the storm of publicity that came when Jean-Marie Messier, the man he was brought in to replace, was accused of insider trading, misusing company funds and misleading investors.

In January 2011, a French court convicted Messier for misuse of funds and misleading investors, while finding former Warner Music Group chairman and chief exec Edgar Bronfman Jr. guilty of insider trading.

Messier was acquitted of manipulating Vivendi’s stock during his time as chief exec, but convicted for misusing company funds in relation to a euro 20 million severance package that he’d subsequently renounced.

Bronfman, who was found to have been involved in insider trading when he was a top exec at Vivendi, has always denied any wrongdoing and is appealing the ruling.

More recently Lévy’s fended off Vodafone’s takeover bid for SFR and bought full control of France’s No.2 phone company, although since then its returns have slumped in the face of tough competition from new and cheaper competitors in the national telecoms market.

The Vivendi-owned companies recently reported record annual profits of $3.5 billion for 2011, largely due to Activision Blizzard, but the problems at SFR mean it doesn’t expect there’ll be a further increases in earnings until 2014.

On June 25 Vivendi was ordered to pay $956 million over a drawn-out legal action dating back to 2003, which relates to the company’s 2001 acquisition of Liberty Media’s stake in Barry Diller’s USA Networks. Vivendi said it will appeal.

Lévy’s immediate successor is Jean-François Dubos, the company’s chief lawyer and general counsel, although it’s not clear if it’s a long-term appointment.