(News Bulletin 247) – The group present in the media and communication has indicated that it is studying a split project into four entities structured around Canal+, Havas, a company bringing together publishing and distribution and finally an investment company bringing together financial holdings, including the one in Lagardère.

The French media and publishing giant Vivendi announced on Tuesday the validation by its supervisory board of a proposed split into four entities: Canal+, Havas, a company bringing together publishing and distribution (Lagardère and Prisma Media) as well as an investment company.

“The management board proposed today (Tuesday, Editor’s note) to the supervisory board – which the latter accepted – to structure this split around four entities”, indicates in a press release the Vivendi group, which had taken control of Lagardère at the end november.

This split project was announced in mid-December and concerned three entities each to be listed on the stock exchange: Canal+, Havas and an investment company which would hold “listed and unlisted financial interests in the sectors of culture, media and entertainment.

Project to create a company in publishing and distribution

What’s new on Tuesday is therefore the project to create “a company bringing together assets in publishing and distribution”, which “would bring together Vivendi’s majority stake in Lagardère and that of 100% in Prisma Media” and “would promote collaborations between the different sectors of activity linked to publishing in its broadest sense,” the group clarified.

This long-term demerger project “must demonstrate its added value for all stakeholders and include an analysis of the tax consequences of the various planned operations,” explains Vivendi.

It should be remembered that Vivendi suffers from a defect that is hardly appreciated by the market: it is a conglomerate, bringing together several relatively distinct activities such as media and cinema (Canal+, Prisma Media), video games (Gameloft), communication (Havas) and more recently Hachette and travel retail (sales in airports and train stations) via the takeover of Lagardère, finalized in mid-November.

However, investors largely prefer “pure players” of an activity to conglomerates bringing together several businesses. They thus penalize the valuation of these conglomerates by applying a stock market discount to them (i.e. a discount compared to the sum of the valuation of each activity of the conglomerate taken each separately). In October this discount stood at around 45%, according to Barclays. This is the whole point of the Vivendi split project: to reduce this stock market discount by obtaining more generous valuation multiples for each of the companies that will be listed.

Moreover, this Wednesday morning around 9:50 a.m., Vivendi shares rose by 0.97% to 10.39 euros (compared to +0.27% for the CAC 40 at the same time).

A new progress report on the project study will be presented at a meeting of the supervisory board on March 7, the date of the publication of the group’s annual results.

Upcoming shareholder vote

Among the other “important steps” to come, Vivendi cites “the consultation of the staff representative bodies of the entities concerned, before which no decision in principle will be taken, the obtaining of the necessary regulatory authorizations, the approvals required from bond holders and other lenders of the group and, when the time comes, the consent of Vivendi’s shareholders”.

At the end of November, the takeover of the Lagardère house by the Bolloré family finally reached its conclusion, after more than three and a half years of adventures, which began when Vincent Bolloré invited himself to the capital of Lagardère as the a high-risk general meeting for its manager.

With this mega-acquisition, Vivendi changes size and goes from 38,000 to around 66,000 employees. Its turnover would increase, on a basis comparable to that of 2022, by 72% to 16.5 billion euros, according to the group.

(With AFP)