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Jean-Bernard Levy, chairman and CEO of Vivendi, shown at a news conference Tuesday, Oct. 24, 2006 in New York.

MARK LENNIHAN/AP

Right after Vivendi's annual strategy weekend a few days ago, chief executive Jean-Bernard Levy co-signed a press release saying the company would make its plans known "in due time." The brainstorming seems to have yielded at least one major strategic decision for the French media and telecom group: Mr. Levy is leaving.

Differences with Jean-René Fourtou, Vivendi's chairman and Levy's predecessor, may be the cause. Investors sent Vivendi shares up 10 per cent on the news. But the departure of one man, awkwardly replaced by an interim CEO, will not be enough to reassure them that the company is out of its strategic quagmire.

Vivendi is trading at half its level when Mr. Levy took over seven years ago. The shares are back to the low touched in 2002 at the end of the tenure of flamboyant but flawed Jean-Marie Messier, who had taken over a French water company and dragged it all the way to Hollywood. Vivendi today has little to do with what it was then. But it is still a ragbag pileup of assets with no synergies to speak of.

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Mr. Levy failed to tackle the company's 30 per cent-odd conglomerate discount. Vivendi's mobile telecom business accounts for almost 60 per cent of revenue and profit. Then there's a media branch made up of Universal Music, which is the world's top music producer, a French pay-TV operator, and Activision, a video games producer which by chance has become a major contributor to the bottom line.

For years Vivendi's supervisory board didn't seem to care that the company would be worth more were it broken up. Mr. Levy's operating performance was fine. But then his management savvy seemed to stumble. He paid Vodafone a top price to buy the 44 per cent of mobile group SFR that Vivendi didn't own. Weeks later, French upstart Iliad hit the market with a price war. And he subsequently seemed to resist a sale of Activision envisioned by the board as a gesture towards focus.

Mr. Levy and Mr. Fourtou sent a joint letter to shareholders in March promising there would be "no taboo" in reviewing the company's strategy. Mr. Fourtou at least meant what he said.

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