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French company Vivendi's chief executive steps down

June 28, 2012|By Meg James
  • The chairman and chief executive of French telecommunications company Vivendi stepped down on Thursday following a disagreement with the board.
The chairman and chief executive of French telecommunications company… (Lawrence K. Ho / Los Angeles…)

Jean-Bernard Lévy, the chairman and chief executive of the French telecommunications company Vivendi, stepped down Thursday following a disagreement with the company's board.

The company, in a statement, described the tension as "a divergence of views on the strategic development of the group." News reports and financial analysts suggest that the board has been embroiled in a debate about whether to carve off assets or break up the company, which consists of European pay-television operations, including France's popular Canal+, Activision Blizzard video game company, Universal Music Group, and phone and Internet services.

The company's stock has also been stagnant.

"The most likely explanation would seem to us to be Lévy's long-standing opposition to a fundamental shake-up of the group's corporate structure," London-based Sanford C. Bernstein analyst Claudio Aspesi wrote in a research report.

The company declined to elaborate on the reasons for Lévy's sudden departure. The development suggests that the board might pursue its plan to break apart its television, video game and music and phone and Internet services.

"While resolution may be still months out, the need for Vivendi to fundamentally change how it thinks about itself is an idea whose time seems to finally be coming, in our view," Aspesi said.

Lévy, a 57-year-old former engineer, was recruited to join Vivendi in August 2002 as chief operating officer. At the time, the company was experiencing major management upheaval and financial turmoil in the wake of the free-spending ways of its onetime chief Jean-Marie Messier, which left the company saddled with billions of dollars in debt.

Lévy helped Vivendi sell assets, including Universal Studios in Hollywood, and pare down its debt. He was key in the negotiations for Vivendi to sell 80% of its stake in the U.S. media company, including the movie and television studio, to General Electric Co. 

He was also the architect of Vivendi's purchase of a majority stake in Activision. The deal, which closed in 2008, merged Vivendi’s highly profitable Blizzard Entertainment studio in Irvine with Activision in Santa Monica to create the world’s largest video game company in Activision Blizzard Inc.

He was also key to Vivendi's push into the Brazilian phone and high-speed Internet market.

"The Supervisory Board wishes to thank Jean-Bernard Lévy for his contribution over the last 10 years alongside Jean-René Fourtou," the company said in a statement.

Earlier this week, a federal court in New York ruled that Vivendi must pay Liberty Media, led by cable mogul John Malone and based in Colorado, about $950 million, stemming from a nearly decade-old dispute that originated during the Messier administration. Last year, Vivendi completely exited the U.S. television and movie business, when it sold its remaining 20% stake in NBC Universal.

The company said Thursday that Jean-François Dubos, Vivendi’s general counsel, had been appointed chairman of the management board.


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