Alcatel, Pinault also dropped
PARIS — Debt-ridden Vivendi Universal suffered a fresh blow Tuesday when its share price fell sharply after it was dumped by two leading European stock market indexes, the Dow Jones Stoxx 50 and Eurostoxx 50.
By the close of trading on the Paris bourse, Viv U’s share price had nose-dived 6.6% to $11.82.
The double ouster came barely two days after the beleaguered conglom earned some praise for the multimillion-dollar sales of its stakes in the Internet portal Vizzavi to Vodafone, and of the French Express-Expansion publishing group, which together will pull in $439 million.
CEO Jean-Rene Fourtou has pledged to sell off $4.9 billion worth of assets in the next nine months in a bid to reduce its $18.9 billion debt.
Viv U’s demotion came as little surprise to market watchers, though. “We had been expecting it to drop out of the indexes,” one analyst said. “It is simply a function of the company’s falling market capitalization.”
The conglom has lost 80% of its value since the start of the year.
Tuesday’s share price dip was fueled by continuing fears that Fourtou may be tempted to flog other valuable Viv U assets — like mobile phone company SFR, now being eyed by Vodafone — at knock-down prices in his haste to reduce the crushing debt.
Being bounced out of the Euro stock indexes brings its own woes, it was pointed out Tuesday, as, for example, tracker funds automatically switch their investments from Viv U to its successor in the indexes. Vivendi Universal refused to comment.
Two other major French firms, the ailing telecoms equipment maker Alcatel and the retail group Pinault Printemps Redoute, which this week appointed former Canal Plus COO Denis Olivennes as its new managing director, also dropped out of the European blue chip stock market indexes.