Summary:

When Vivendi (EPA: VIV) announced it was buying EMI’s recorded music division last week, it cryptically said the deal would see it sell “500…

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When Vivendi (EPA: VIV) announced it was buying EMI’s recorded music division last week, it cryptically said the deal would see it sell “500 million euros worth of non-core UMG assets”.

Half a billion is a lot to be considered “non-core”, and we still aren’t sure what it refers to. But Vivendi has now sold three percent of the shares of games maker Activision (NSDQ: ATVI) Blizzard for $427 (£269.31) million.

The move looks strange because Activision Blizzard, which was formed by Vivendi merging its Blizzard with Activision, is one of the Vivendi empire’s biggest growth engines with top-tier smash titles like Call Of Duty and World Of Warcraft, whereas the music business is in a long decline.

Bernstein analyst Claudio Aspesi (via FT): “The wisdom of selling about three percent in a business that is one of the key bastions of growth for the group to aid a transformational acquisition in a challenged business, such as recorded music, seems questionable.” Still, even after this sell-off, Vivendi still owns 60 percent of Activision Blizzard.

In a nine-month earnings update on Wednesday, Vivendi raised Activision Blizzard’s 2011 EBITDA outlook to €850 ($1150.22/£725.43) million. The group is rocketing because its main franchises are so popular and because they attract paying online customers (World Of Warcraft has over 11.5 million subscribers). Profit was up 38.6 percent from last year on 4.8 percent higher higher revenue.

Vivendi says Universal Music Group observed a “rebound” for the second straight quarter, with quarterly revenue up 36.3 percent from a year ago. “The 11.3 percent increase in (nine-month) digital recorded music sales and higher license income only partly offset a lower demand for physical products.”

Vivendi on Wednesday upped its 2011 net income forecast by €200 ($270.64/£170.69) million to €2.85 ($3.86/£2.43) billion, even after getting hit by a predicted €350 ($473.62/£298.71) million in new French taxes.

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