Vivendi Spin-Offs: Analysts Demand Clarity for Investor Confidence
Following the December spin-offs of Canal+, Havas, and Louis Hachette Group from Vivendi, investors and analysts are calling for more transparent strategies. The break-up aimed to unlock value by creating four multi-billion-euro companies, but some have underperformed due to insufficient clarity.
Underwhelming Debut and Concerns
Post-split trading revealed declines in the standalone companies' shares, undermining the Bollore family's goal to enhance value. Only Louis Hachette has surpassed its listing price, while Vivendi remains above its pre-split adjusted closing price.
Analysts cite a lack of strategic information, disappointing financial guidance, and uncertainty surrounding Canal+'s MultiChoice acquisition as contributing factors. The combined market capitalization of the four companies stands at €7.7 billion, below Vivendi's pre-breakup value of €8.3 billion.
Delayed Explanation and Future Outlook
Canal+, the largest spin-off, has underperformed with a 31% decline in its share price since listing. Analyst Francois Godard suggests the cycle's optimal splitting point was missed, impacting Canal+'s performance.
Enders Analysis expects a clearer market understanding in the second half of 2025 after several quarters of results. Havas and Louis Hachette will report their full-year results in March and February, respectively. Canal+ has yet to announce a reporting date.
Uncertainty and Minority Concerns
UBS analysts noted that the split has not created immediate value and expressed skepticism about Canal+'s path to shareholder returns. They attributed the sell-off to unmet expectations in financial guidance and the absence of dividends.
Uncertainty surrounding Canal+'s MultiChoice acquisition persists, including its profitability trajectory. Some shareholders have offloaded their Canal+ shares due to ineligibility for certain indexes and investment restrictions on sterling-traded shares.
Minority shareholders, such as CIAM and Phitrust, opposed the break-up, arguing it diminishes their protection under French stock market laws. Phitrust's co-founder predicts Vivendi will face ongoing conglomerate discounts due to its status as a financial holding company.
Despite these concerns, Vivendi and Yannick Bollore maintain that the split benefits minority shareholders and has shareholder advisory firm support.
Patience Required and Revaluation Expected
Arkea Asset Management fund manager Stéphane Le Gall anticipates a revaluation of the combined stocks once the companies clarify their strategies. He believes the Vivendi galaxy will unfold in 2025 rather than 2024. The fund retains its holdings in all entities.