Vivendi’s recent ‘galaxy’ of corporations needs more time to clarify strategy, analysts and investors say

By Gianluca Lo Nostro, Florence Loeve and Paul Sandle

GDANSK/PARIS/LONDON (Reuters) – Vivendi management and executives of a few of its newly spun out corporations – Canal+, Havas and Louis Hachette Group – must lay out more clearly their strategies to persuade investors the break-up was value it, analysts and investors said.

The spin-offs in December, backed by the Bollore family, split Vivendi into 4 multi-billion-euro corporations in a bid to unlock value because the French media conglomerate’s overall market capitalisation was estimated to be lower than the sum of its parts.

But a few of the standalone corporations had a weak start, triggered partially by a lack of know-how about strategy, some disappointing financial guidance and uncertainty around pay-TV group Canal+’s acquisition of broadcaster MultiChoice, the analysts and investors said.

Shares in Vivendi’s newly listed businesses fell of their first month of trading to levels below their combined value before the split, undermining the Bollore family’s hopes to spice up value.

Only Louis Hachette shares are currently above their listing price, and Vivendi is trading above the last closing price before the split as adjusted by stock exchange operator Euronext.

The combined market capitalisation of the 4 corporations was 7.7 billion euros ($7.92 billion), based on LSEG data as of the close on Jan. 17. Before the break-up, Vivendi was value about 8.3 billion euros, based on LSEG data.

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

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

Analyst Francois Godard at Enders Evaluation said it had been inconceivable to separate the group on the optimum point within the cycle for the entire corporations, and with its South Africa deal yet to shut, Canal+ had suffered.

“Now they should take their time to clarify their business,” he said, referring to Canal+.

The market would have a clearer view within the second half of 2025 after a number of quarters of results, he said.

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

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

UBS analysts said last month that the split had didn’t create value on day one, adding that the trail to shareholder returns is unclear at Canal+.

They ascribed the sell-off in Canal+ shares to financial guidance falling wanting investor expectations and an absence of dividend.

There may be also some uncertainty concerning the broadcaster’s acquisition of South African broadcaster MultiChoice, analysts added, including clarity on the path to profitability, not expected until after the deal closes.

“We do not really know what is going on to occur, so individuals are cautious,” said Jean-Michel Salvador, an analyst at French equity research firm AlphaValue.

Analysts said some shareholders have offloaded their stakes in London-listed Canal+ as the corporate isn’t eligible to hitch certain indexes since it is domiciled in France or because some investors are restricted from holding shares traded in sterling.

MINORITY OPPOSITION

Some minority shareholders were against the break-up plan, including activist funds CIAM and Phitrust, arguing that the split would deprive investors like them of the protection of French stock market laws.

Bollore’s holding company owns over 30% of every of the three spun-off entities, which previously under French rules would require a compulsory offer for all of the shares. But this doesn’t apply to the brand new entities.

Phitrust’s co-founder, Denis Branche, said that while it could take a few months to get a greater picture, he didn’t imagine the now smaller Vivendi holding company would have the ability to repair its longstanding conglomerate discount.

“The market (now) considers Vivendi a financial holding, so there’ll all the time be this discount”, he told Reuters.

Vivendi and Yannick Bollore, chairman of Vivendi’s supervisory board and son of Vincent Bollore, rejected the activist shareholders’ claim that the break-up deprives minority shareholders of protections. Vivendi has said the split was endorsed by shareholder advisory firms.

Last month, Barclays said Havas was trading at a reduction to peers because of a governance structure that forestalls board changes and hostile takeovers and that this was an element deterring some investors.

Stéphane Le Gall, a fund manager at Arkea Asset Management, one other minority shareholder in Vivendi, told Reuters he was waiting for a revaluation of the combined 4 stocks, which he believes will occur when the businesses explained their respective strategies.

“Let’s be patient, the Vivendi galaxy is a story of 2025, not December 2024,” he said. The fund that he manages has kept all its shares in the various entities for now.

($1 = 0.9724 euros)

(Reporting by Gianluca Lo Nostro in Gdansk, Florence Loeve in Paris, and Paul Sandle and Amy-Jo Crowley in London. Writing by Anousha Sakoui. Editing by Josephine Mason and Jane Merriman)

Finapress

Vivendi’s recent ‘galaxy’ of corporations needs more time to clarify strategy, analysts and investors say

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