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Vivendi supervisory board backs demerger, Bollore

The logo of French mobile phone operator SFR is seen on a shop in Paris August 29, 2013. REUTERS/Charles Platiau
The logo of French mobile phone operator SFR is seen on a shop in Paris August 29, 2013. REUTERS/Charles Platiau

PARIS (Reuters) - Vivendi's supervisory board on Tuesday unanimously backed a plan to demerge the group's SFR business as it reduces exposure to telecoms and focuses on media.

The French group named Hearst Magazines' Arnaud de Puyfontaine head of media and content activities to run the remaining businesses - Universal Music Group, pay-TV company Canal Plus and Brazilian telecom unit GVT.

The supervisory board also confirmed top shareholder Vincent Bollore as chairman of the future Vivendi.

The conglomerate is in the midst of a broad revamp to pay down debt and focus on media, selling its stakes in video games publisher Activision Blizzard and Maroc Telecom, as well as agreeing a deal to take full control of Canal+ France.

Current Chairman Jean-Rene Fourtou, who had clashed with Bollore over the latter's desire for more influence over the company's future, told Le Monde newspaper last month that Bollore could replace him as chairman of the media branch after the split.

Dissent between the two had caused an earlier selection process to find a boss for the new media company to fall apart in September.

Vivendi said the demerger plan could see Vivendi shareholders receive shares in SFR, France's No. 2 telecom operator, on the day of the transaction.

"It would offer them the opportunity to invest in two separate vehicles listed on the stock market and valued according to the specifics of their respective sectors," Vivendi said in a statement.

The move would also give SFR "greater strategic autonomy to seize opportunities in a transforming market", Vivendi added.

Jean-Yves Charlier will continue as chairman and chief executive of SFR, while Puyfontaine will bring "strong international experience in media" and "know-how in digital strategy" to the remaining businesses, Vivendi said.

A graduate of the Europe Business School and Harvard Business School, Puyfontaine has been CEO of Hearst UK since April 2009 and since June 2011 executive vice-president of Hearst Magazines International, where he was appointed managing director for Western Europe in August.

"He's unlikely to empire build, which is good, and probably loyal to Bollore," Kepler Cheuvreux analyst Conor O'Shea said. "Though he has no experience in audiovisual media, his cost-cutting and integration skills in a struggling media like magazines will help.

"The market will probably take the exit of Fourtou as a clear positive."

The group added that it would submit the demerger plan to works councils and regulatory authorities, and that it aimed to put it to shareholders at the next annual meeting in late June.

(Reporting by James Regan; additional reporting by Leila Abboud; editing by Astrid Wendlandt and David Evans)

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