Vivendi SA’s share price down, new Chairman Bollore to follow media makeover strategy

The new Chairman of Vivendi SA, who headed the company on June 24th – Mr. Vincent Bollore made a statement saying that he intends to lead the transformation of the French company into a media business and look for cooperation between the separate TV and music divisions.

Mr. Bollore said in the statement, which was cited by Bloomberg: “I have a clear strategy: it’s to transform this financial holding into an integrated content group. There’s hidden value at Vivendi – it’s in convergence, in the synergies we can get.” As reported by the Financial Times, Mr. Bollore also added: “There are more synergies between the three business units that Vivendi has been bale to exploit in the past.”

The plans put the new Chief of Vivendi SA ahead of his predecessor, who did not manage to deal with creating real teamwork between the companys units that normally run different operations. Mr. Bollore, who is currently the biggest shareholder in the company with his 5% stake, took over the helm as Chairman from Jean-Rene Fourtou, who will remain at the position of honorary president and will have an advisory function on further integration of the companys units.

The new Chairman of Vivendi also provided several examples of eventual collaboration between the separate businesses not only on the U.S. market but also worldwide. The company has started following a strategy of reorganization of its television and music units at the time when Mr. Fourtou was heading it and now revealed that it intends to return 5 billion euros (6.8 billion dollars) to its shareholders by 2015 through dividends and share buybacks.

One of the analysts, who work at Kepler Cheuvreux – Conor O-Shea commented for the Wall Street Journal: “It is easy to talk about it, but what are they going to do? For starters, Canal Plus is largely domestic while Universal is a global business. So there is very limited overlap.”

Vivendi SA was losing 4.77% to trade at 18.27 euros per share by 11:12 GMT, marking a one year change of +27.82%. According to the information published on the Financial Times, the 22 analysts offering 12-month price targets for Vivendi SA have a median target of 20.75, with a high estimate of 27.00 and a low estimate of 16.90. The median estimate represents a 8.16% increase from the last price of 19.19.