Attendees visit the Activision Blizzard Inc. display at the E3 Expo in Los Angeles. Photographer: Patrick Fallon/Bloomberg

Vivendi SA (VIV) is set to decide on the future of its video-game unit Activision Blizzard Inc. (ATVI) at a senior executive meeting this month as it considers options for a reorganization, said people with knowledge of the matter.

The main scenario to be discussed is a sale of part or all of Vivendi’s 61 percent stake in Activision, the maker of “Call of Duty” with a market value of about $13 billion, said the people, who asked not to be identified because the meeting is private. Vivendi has met with investors in the past weeks to discuss options, one of them being a spinoff of pay-TV unit Canal Plus, which is 20 percent owned by Lagardere SCA (MMB), said one person.

Vivendi jumped as much as 5.3 percent in Paris and Activision fell as much as 6.2 percent in New York. A sale of Activision would be an attempt by Chairman Jean-Rene Fourtou to unlock value from assets he has said are at a discount because of the holding structure at Vivendi, which also owns Universal Music Group and phone operators in France, Morocco and Brazil. Fourtou will lead the weekend retreat in Corsica, which starts June 22 and will be attended by top executives including Chief Executive Officer Jean-Bernard Levy, as Paris-based Vivendi looks for ways to reverse a 28-percent slide in its stock price in the past 12 months through yesterday, the people said.
Annual Gathering

“A single sale is actionable, but it risks being a short- term solution,” said Claudio Aspesi, an analyst at Sanford C. Bernstein & Co. in London, who recommends holding the stock. “Six to 12 months from now, questions will pop up again. What happens next? Why does it makes sense to keep the rest of the assets together? Is there any strategy?”

A Vivendi spokesman said the executive meeting is an annual gathering that has taken place since 2005. He declined to discuss specific scenarios, adding that nothing has been decided and that the meeting is a forum of exchange and discussion, not for quick-fix decisions or solutions.

Maryanne Lataif, a spokeswoman for Activision, declined to comment.

“We will not stay idle,” Fourtou said at the company’s shareholder meeting in April. “Members of the supervisory and management boards as well as the main managers will spend three days together soon, like every year. We will look over our strategy, our perimeter and our image among investors.”

Vivendi jumped 3.7 percent to a six-week high of 13.59 euros at the close of trading in Paris. Activision fell 1.7 percent to $11.87 at 2:05 p.m. in New York. Bloomberg News first reported on April 25 that the company was considering an overhaul of its structure that may lead to its breakup. Vivendi has a market value of 17.5 billion euros ($22 billion).
Shares Outperform

Activision, based in Santa Monica, California, is Vivendi’s fourth-biggest business, with sales of $4.76 billion last year. Shares of the world’s largest video-game publisher have gained 4.5 percent in the past year before today, outperforming Electronic Arts Inc. (EA) and Take-Two Interactive Software Inc. (TTWO), helped by demand for the “Call of Duty” shooter franchise.

Activision was Vivendi’s second-fastest growing unit last year, after Brazilian phone operator GVT. The video-game publisher reported 2011 earnings, excluding taxes, of $1.33 billion, or 28 percent of sales.
Bigger Overhaul

An exit from Activision would be another retreat from the globe-trotting conglomerate structure Vivendi pioneered under former CEO Jean-Marie Messier, who nearly bankrupted the company with a $77 billion acquisition spree before he was ousted in 2002. In 2009 Levy undid Messier’s signature deal by selling Vivendi’s stake in NBC Universal, the TV network and Hollywood studio now owned by Comcast Corp. (CMCSA), to General Electric Co. for $5.8 billion.

Vivendi has yet to decide what it would do with proceeds from any sale, the people said. The company may decide to return the funds to shareholders through a share buyback or to reinvest in its media and telecommunications businesses, they said. Vivendi could also decide against a sale of Activision, the people said.

The company has weighed a bigger overhaul of its structure, though this option may have moved down its list of alternatives, the people said.

Vivendi looked at splitting into two, with one part consisting of media units Universal Music Group, Canal Plus and Activision, and the other telecommunications and content- distribution businesses SFR, GVT and Maroc Telecom, people familiar with the matter said in April.
No Taboo

In a March 27 letter to shareholders, Fourtou and CEO Levy said it’s a misconception that Vivendi’s various businesses have no connection. Still, questions about whether units should be sold or the company broken into pieces are “not taboo,” they said.

The annual executive retreat is held at a different location every year. This year’s venue, Corsica, is a Mediterranean island popular with tourists because of its coastlines and mountains.

Slowing sales and earnings growth at Vivendi’s businesses have left the company’s shares hovering near a nine-year low. The stock is down 34 percent since Levy announced his latest deal -- the 7.95 billion-euro buyout of French wireless operator SFR -- in April 2011.

Since then, SFR has come under pressure from new discounter Iliad SA. (ILD) SFR has proposed cost-cutting plans and will give details to unions in the coming weeks. Vivendi’s Levy hired Vodafone executive Michel Combes to lead SFR and replace Frank Esser, who has stepped down after 11 years in the role.

Combes will bring “strategic vision” to the unit, which accounts for 41 percent of Vivendi’s sales and 34 percent of profit, Levy said last week.

Vivendi destroyed Sierra and lots of other game companies. I hope they burn.