Vivendi’s new ‘galaxy’ of firms wants extra time to clarify technique, analysts and buyers say

By Gianluca Lo Nostro, Florence Loeve and Paul Sandle

GDANSK/PARIS/LONDON (Reuters) – Vivendi (OTC:VIVHY) administration and executives of a few of its newly spun out firms – Canal+, Havas and Louis Hachette Group – want to put out extra clearly their methods to persuade buyers the break-up was price it, analysts and buyers stated.

The spin-offs in December, backed by the Bollore household, cut up Vivendi into 4 multi-billion-euro firms in a bid to unlock worth because the French media conglomerate’s total market capitalisation was estimated to be lower than the sum of its elements.

However a number of the standalone firms had a weak begin, triggered partially by a lack of awareness about technique, some disappointing monetary steerage and uncertainty round pay-TV group Canal+’s acquisition of broadcaster MultiChoice (JO:MCGJ), the analysts and buyers stated.

Shares in Vivendi’s newly listed companies fell of their first month of buying and selling to ranges under their mixed worth earlier than the cut up, undermining the Bollore household’s hopes to spice up worth.

Solely Louis Hachette shares are at present above their itemizing value, and Vivendi is buying and selling above the final closing value earlier than the cut up as adjusted by inventory alternate operator Euronext (EPA:ENX).

The mixed market capitalisation of the 4 firms was 7.7 billion euros ($7.92 billion), based mostly on LSEG knowledge as of the shut on Jan. 17. Earlier than the break-up, Vivendi was price about 8.3 billion euros, based mostly on LSEG knowledge.

Canal+ listed in London, promoting company Havas debuted in Amsterdam and publishing enterprise Louis Hachette Group listed in Paris.

Canal+, the largest firm, has been the laggard, with its shares down 31% since they listed on Dec. 16.

Analyst Francois Godard at Enders Evaluation stated it had been not possible to separate the group on the optimum level within the cycle for all the firms, and with its South Africa deal but to shut, Canal+ had suffered.

“Now they need to take their time to clarify their enterprise,” he stated, referring to Canal+.

The market would have a clearer view within the second half of 2025 after just a few quarters of outcomes, he stated.

Havas and Louis Hachette report their full-year outcomes on March 5 and February 13 respectively. Canal+ has but to set a date for outcomes.

Vivendi, Canal+, Havas, and Louis Hachette in addition to representatives for the Bollore Group declined to remark.

UBS analysts stated final month that the cut up had didn’t create worth on day one, including that the trail to shareholder returns is unclear at Canal+.

They ascribed the sell-off in Canal+ shares to monetary steerage falling in need of investor expectations and a lack of dividend.

There’s additionally some uncertainty concerning the broadcaster’s acquisition of South African broadcaster MultiChoice, analysts added, together with readability on the path to profitability, not anticipated till after the deal closes.

“We do not actually know what is going on to occur, so persons are cautious,” stated Jean-Michel Salvador, an analyst at French fairness analysis agency AlphaValue.

Analysts stated some shareholders have offloaded their stakes in London-listed Canal+ as the corporate will not be eligible to hitch sure indexes as a result of it’s domiciled in France or as a result of some buyers are restricted from holding shares traded in sterling.

MINORITY OPPOSITION

Some minority shareholders had been against the break-up plan, together with activist funds CIAM and Phitrust, arguing that the cut up would deprive buyers like them of the safety of French inventory market legal guidelines.

Bollore’s holding firm owns over 30% of every of the three spun-off entities, which beforehand beneath French guidelines would require a compulsory supply for all of the shares. However this doesn’t apply to the brand new entities.

Phitrust’s co-founder, Denis Branche, stated that whereas it could take a few months to get a greater image, he didn’t consider the now smaller Vivendi holding firm would have the ability to repair its longstanding conglomerate low cost.

“The market (now) considers Vivendi a monetary holding, so there’ll all the time be this low cost”, he instructed Reuters.

Vivendi and Yannick Bollore, chairman of Vivendi’s supervisory board and son of Vincent Bollore, rejected the activist shareholders’ declare that the break-up deprives minority shareholders of protections. Vivendi has stated the cut up was endorsed by shareholder advisory corporations.

Final month, Barclays (LON:BARC) stated Havas was buying and selling at a reduction to friends attributable to a governance construction that stops board adjustments and hostile takeovers and that this was an element deterring some buyers.

Stéphane Le Gall, a fund supervisor at Arkea Asset Administration, one other minority shareholder in Vivendi, instructed Reuters he was ready for a revaluation of the mixed 4 shares, which he believes will occur when the businesses defined their respective methods.

“Let’s be affected person, the Vivendi galaxy is a narrative of 2025, not December 2024,” he stated. The fund that he manages has stored all its shares within the totally different entities for now.

($1 = 0.9724 euros)