PARIS (Reuters) - Vivendi (VIV.PA) said it has no intention of selling its stake in Telecom Italia (TLIT.MI), despite a bruising battle with an activist fund, and was lining up banks for a possible sale of part of its Universal Music Group division.
The French media group, which announced better-than-expected third quarter sales on Thursday, is in a tussle with activist fund Elliott over the running of Telecom Italia, in which Vivendi owns around 24 percent.
That has prompted market speculation that Vivendi could sell its stake in the Italian company.
“I can tell you that this is completely and utterly wrong,” Vivendi’s chief executive Arnaud de Puyfontaine told analysts.
This week, Telecom Italia sacked Chief Executive Amos Genish while he was away on business in Asia, ousting a man viewed by some directors as an obstacle to their campaign for a more aggressive shake-up at the company.
Genish was appointed last year to run the underperforming former monopoly by Vivendi, but since then directors backed by Elliott have wrested control of the board.
Vivendi had reacted angrily to Genish’s ouster, calling it a mean and cynical manoeuvre by some board members who moved secretly against Genish, convening the board while he was overseas on business.
On Thursday, de Puyfontaine told analysts that Vivendi was a long-term shareholder in Telecom Italia and would remain so.
Sales rose 5.5 percent in the third quarter from a year ago to 3.38 billion euros
(3 billion pounds), beating a forecast in an Inquiry Financial poll for Reuters of 3.3 billion euros.
Vivendi also said it hoped to hire five to seven banks to advise it on a sale of a stake in UMG, and reiterated that cash from any UMG deal could finance a share buyback or acquisitions.
Vivendi said in July that it was considering selling up to half of its UMG music arm to one or several strategic partners.
UMG’s roster of artists include the likes of rapper Drake, singer Lady Gaga, The Beatles and The Rolling Stones.
Vivendi also on Thursday said it had sealed a previously announced deal to buy French publishing company Editis, on an enterprise value basis of 900 million euros.
The holding company of billionaire Vincent Bollore (BOLL.PA) has roughly 29 percent of the voting rights in Vivendi and 26 percent of Vivendi’s share capital.
Reporting by Sudip Kar-Gupta; Editing by Elaine Hardcastle and Susan Fenton