(News Bulletin 247) – The conglomerate specializing in media and video games has provided an update on its plan to list in four separate companies. The company indicated that it plans to list the encrypted channel in London.

Vivendi’s plan to list four entities is becoming clearer. As a reminder, the conglomerate specializing in media, video games and communications launched this project at the end of 2023.

The group has very clearly stated the aim of such an operation: to reduce its conglomerate discount on the market. This discount represents the difference between the sum of the value of the companies held by a conglomerate and the stock market valuation of this same conglomerate.

This discount is due to the fact that the market (generally) values ​​pure-players (companies with a single activity) better than companies with diversified activities. In the case of Vivendi, this discount at the end of last year was very high, representing 45% of the book value of the sum of Vivendi’s interests, according to Barclays.

Several months after launching this split project, Vivendi came to provide several clarifications to the market on Monday. The company stated that its study had “demonstrated the feasibility of this project under satisfactory conditions and identified the most appropriate stock exchanges for the three companies”, which will be separated from Vivendi.

>> Access our exclusive graphic analyses, and enter the confidence of the Trading Portfolio

Canal+ towards a dual listing?

The group has indicated that Canal+, which was once listed on the Paris Stock Exchange, would, if the project goes through, be listed on the London Stock Exchange. This choice should “reflect the international dimension” of the encrypted channel, as it prepares to acquire 100% of the South African Multichoice, the largest acquisition in its history (2.6 billion euros for 100% of the shares).

“With nearly two-thirds of its subscribers outside France, a film and series distribution network present on all continents, and growth drivers drawn from its recent developments in the African, European and Asia-Pacific markets, a London listing would constitute an attractive solution for international investors likely to be interested in the group,” justifies Vivendi.

Canal+ will continue to be domiciled and taxed in France, the group assures. Vivendi also specifies that the channel “could, depending on the success of its offer to purchase Multichoice, be the subject of a second listing on the Johannesburg Stock Exchange”.

Havas with a foundation to keep double votes

As for Havas, Vivendi’s communications group, its listing is being considered on the Amsterdam Stock Exchange, where Vivendi had already successfully introduced its former record company Universal Music Group in 2021 as part of a listing-sale to its shareholders.

Vivendi argues that Havas conducts the majority of its activities internationally and that a listing in Amsterdam would place the company “in the best conditions to implement its new global Converged strategy, pursue its solid growth as well as its strong commercial and creative dynamic, and stabilize its capital, a guarantee of sustainability for its talents and its clients.”

Vivendi also intends to set up a Dutch rights foundation to guarantee “the preservation of the group’s independence and identity” while “multiple voting rights, initially double after two years of ownership, then quadruple two years later, would be offered to shareholders invested in the long term, taking into account for the double votes the length of time they have held their interests in Vivendi”. Like Canal Plus, Havas would remain a tax resident in France.

Vivendi also announced the creation of a new company, “Louis Hachette Group”, which would combine its interests in publishing and distribution, i.e. its 63.5% share in the Lagardère group and its 100% share in Prisma Media (Geo, Capital). This company would be listed on Euronext Growth, a compartment of the Paris Stock Exchange reserved for small and medium-sized enterprises and which is not subject to the strictest European rules.

Vivendi, for its part, would remain listed separately. The group estimates that the decision to carry out this split project could be taken at the end of October, at the end of the information and consultation procedure of its employees. The group would then submit this decision at an extraordinary general meeting in December, which means that two-thirds of the votes would be necessary for the project to get the green light.

“If approved by the extraordinary general meeting, the allocation to Vivendi shareholders of the shares of the various companies concerned, and their listing on the stock exchange, should take place in the following days,” the company explains.

Distribution of debt

In terms of purely financial aspects, Vivendi explained that Canal+ and Havas would have “virtually zero” debt, with the exception of the debt contracted by Canal+ to finance the acquisition of Multichoice. Louis Hachette Groupe would only hold the debt specific to the Lagardère company (i.e. a net debt of 2 billion euros) and Vivendi would retain a net debt of 1.5 billion to 2 billion euros post-split.

The Bolloré group, Vivendi’s largest shareholder with around 29.9% of the capital at the end of 2023, would hold 30.6% of Canal+ and Louis Hachette Group. “It would hold around 30.6% of the capital in Havas NV and could hold, due to double voting rights, more than 40% of the voting rights,” explains Vivendi.

This project of splitting into four entities would not give rise to any public takeover bid on the companies separated from Vivendi, the company specifies.

On the Paris Stock Exchange, the announcement was rather well received by the market, with Vivendi gaining 1.5% within a CAC 40 which is admittedly in good shape (+1.2%).

UBS considers this clarification from Vivendi as “positive” for the stock. “This morning’s press release provides further indications that the split could take place more quickly than investors had initially anticipated. The additional details are useful, particularly with regard to the location of the listings and the distribution of Vivendi’s net debt,” the Swiss bank explains.