Vivendi's Telecom Hang-Ups

Vivendi wants to turn itself from a telecom-heavy conglomerate into a media company focused on music, television and games. That seems like a smart move.

Vivendi isn't short of media-investment opportunities. One option is to buy the 39% of U.S.-listed games publisher Activision Blizzard it doesn't already own, swapping annual dividends worth $200 million for $1.6 billion in operating cash flow. That could allow Vivendi to raise dividends by €1 billion to €2.4 billion, says Credit Suisse. Another option is to buy other games publishers to merge with Activision. But Vivendi needs to sell its telecom assets before it can start spending. The snag is that natural bidders for GVT such as Telecom Italia and Telefónica are also under pressure to deleverage, leaving Vivendi reliant on financial sponsors and satellite operator DirecTV. And a sale of the Maroc Telecom stake is potentially complicated by government influence in Morocco.