Vivendi, under pressure from a shareholder to break itself up, defended its conglomerate structure combining telecoms and media assets on Wednesday, saying it generated value for shareholders.

The group, which controls France's number two mobile operator SFR, said last week its was facing calls from Norwegian entrepreneur Alexander Vik, who is estimated to own a 4 percent stake, to split up its businesses.

"We do not want to be broken apart and we feel that (keeping) both media and telecoms under the same roof is creating value for shareholders," Vivendi Finance Director Jacques Espinasse told a conference in Washington organised by Morgan Stanley.

Espinasse argued that Vivendi's pay-TV unit Canal Plus would not have been able to offer 600 million euros a year for the broadcasting rights of League 1 French soccer matches if it had not been for the group's deep pockets.

He also said Vivendi's strong balance sheet gave Canal Plus a strong hand in negotiating the recent buy-out of rival TPS.

"Why should we destroy something which is positive for the various businesses we have," Espinasse added in remarks monitored by webcast.


Vivendi's board last board rejected what people close to Vik said was a 40-billion-euro-indicative offer for the group and which Vivendi described as only a "working document."

Vivendi is worth about 32 billion euros at market prices but people close Vik say the sum-of-the-parts value is higher.

Some analysts however believe breaking up Vivendi would be difficult since it would lose lucrative tax benefits and run into complications over pre-emptive rights held by partners.

Espinasse said Vivendi was bent on keeping its music business, Universal Music Group (UMG), the world's biggest record company. He said UMG was on the lookout for acquisitions particularly in the music publishing field.

He said German media group Bertelsmann [BERT.UL] could put some music publishing assets for sale which could be of interest while acquisition opportunities might also be created by a merger between EMI and Warner Music Group.

He also argued that UMG, which has been hard hit by piracy, was on the mend and digital music sales were helping make up for the decline in sales of physical records and CDs.

"We feel we have touched the bottom of the swimming pool and we are going up... We do not want to sell our music assets, we think profitability will continue to grow," Espinasse said.