Vivendi will sell rest of SFR to Numericable, plans share buyback

By Leila Abboud and Gwénaëlle Barzic PARIS (Reuters) - French media group Vivendi will reward shareholders with a share buyback and a generous dividend after agreeing to sell its remaining stake in telecoms group SFR to cap two years of asset sales. Vivendi said on Friday that it will sell its 20 percent stake in Numericable-SFR to billionaire Patrick Drahi, who will carry out the 3.9 billion euro ($4.36 billion) purchase via his holding company Altice and Numericable-SFR itself. The sale at 40 euros per share is well below Numericable-SFR's current share price of 55.40 euros but above the 33.30 euros per share Vivendi received when it sold SFR to cable company Numericable in November. Vivendi was supposed to remain a minority shareholder in Numericable-SFR for at least a year and analysts expressed concern at the price at which it has sold. "We still struggle to find the disposal price as attractive -- it basically means that Vivendi abandoned all the equity-linked upside in the deal," Exane BNP Paribas analyst Charles Bedouelle wrote. Vivendi, however, said its decision was prudent because of the liquidity issues when selling such a big block of shares on the open market. After selling three of its six businesses since mid-2013 in a strategy overhaul to exit telecoms, Vivendi has amassed a war chest to deploy on acquisitions and rewarding shareholders. In April it promised to pay 5 billion euros in dividends after selling SFR. Several months later it agreed to sell Brazilian telecoms business GVT to Telefonica for 7.2 billion euros in cash and shares. The deal could close by the summer. The asset sales prompted Vivendi on Friday to increase the amount it will return to shareholders to 5.7 billion euros through to 2017. It pledged to pay an ordinary dividend of 1 euro per share for 2014 and aims to maintain that payout level for 2015 and 2016. SHARE BUYBACK The group also plans a share buyback worth 2.7 billion euros at a maximum purchase price of 20 euros per share. After its telecoms retreat, Vivendi now owns pay-TV business Canal Plus, which is focused on France and has some activities in Poland and Africa, as well as Universal Music Group, a global leader in music publishing and production. Under chairman and largest shareholder Vincent Bollore, Vivendi has said it wants to build its content and media businesses organically and through acquisitions. The company also confirmed that it has received offers for its TVN stake in Poland and said it could quickly enter exclusive talks with a bidder. Vivendi's overall annual sales were 10.01 billion euros, it said, slightly below analysts' expectations for 10.21 billion euros, according to Thomson Reuters I/B/E/S. Net income for the year was 626 million euros, against forecasts of 679 million euros. Universal Music Group's annual sales fell 5.6 percent to 4.56 billion euros, hurt by continued weakness in CD sales, which were not totally offset by higher revenue from streaming. Sales at Canal Plus rose 2.7 percent to 5.46 billion euros, helped by its Studiocanal production unit, which had hit movies this year including "Paddington" and "The Imitation Game". The group said it expects increased revenue this year, helped by international growth in pay-TV and higher income from music streaming. It said operating margins should be close to last year's level, while adjusted net income would rise by about 10 percent because of lower restructuring charges and interest expenses. Vivendi shares have gained 5.2 percent this year after rising 11 percent last year. The group's current market capitalization is 29.43 billion euros. ($1 = 0.8937 euros) (Editing by Dominique Vidalon and David Goodman)