Vivendi SE, the French media conglomerate, received shareholder approval on Monday to proceed with its plan to spin off three major business units: pay-TV provider Canal+, advertising agency Havas, and publisher Louis Hachette Group. The spinoff, expected to unlock value for investors, marks a significant shift in Vivendi’s strategy.
Table Content:
Vivendi Restructures: A New Era for Canal+, Havas, and Hachette
The shareholder vote, held in Paris, overwhelmingly supported the separation of Canal+, Havas, and Hachette into independently listed companies. Canal+ will list in London, Havas in Amsterdam, and Hachette in Paris, while Vivendi will remain listed in France, primarily holding stakes in Universal Music Group NV and Telecom Italia SpA. The initial listing of the three spun-off companies is scheduled for December 16th.
This restructuring, championed by billionaire Vincent Bolloré, Vivendi’s largest shareholder, represents a departure from his previous strategy of building a vertically integrated European media powerhouse. Bolloré, who holds a 29% stake in Vivendi through Bolloré SE, believes that the spinoff will address the conglomerate discount that has historically impacted Vivendi’s valuation. By allowing each business to operate independently, the move aims to foster faster growth and enhance shareholder value.
From Integrated Empire to Independent Entities
The decision to separate these businesses contrasts with Bolloré’s earlier vision of creating a European media giant capable of competing with industry titans like Netflix and Disney. This prior strategy focused on leveraging synergies between Vivendi’s diverse holdings, envisioning the transformation of intellectual property, such as Paddington Bear, into multifaceted media franchises spanning film, publishing, and marketing.
The shareholder vote demonstrated strong support for the spinoff plan, with nearly 98% approval for each of the three separations. Following the vote, Vivendi’s shares saw a modest increase of 1.7% in Paris trading, reaching €8.90. Despite this positive movement, the stock remains down approximately 8% year-to-date. Existing Vivendi shareholders will receive one share in each of the spun-off companies (Canal+, Havas, and Hachette) for every Vivendi share they own.
Market Valuation and Future Outlook
According to JPMorgan analysts, the estimated equity values of the separated entities are approximately €6 billion for Canal+, €2.5 billion for Havas, and €2.2 billion for Hachette. Yannick Bolloré, chairman of Havas and Vivendi’s supervisory board, emphasized that the December 16th listings represent just the initial step. He indicated that the market performance of the newly independent companies will be evaluated over the next 12 to 18 months.
Challenges and Opposition to the Spinoff
The path to the spinoff hasn’t been entirely smooth. Vivendi’s share price has experienced a decline in recent months, fueled by analyst concerns regarding the individual businesses’ performance and governance, raising doubts about the plan’s effectiveness in eliminating the conglomerate discount.
Furthermore, two activist investors, Phitrust and CIAM, voiced their opposition to the proposal. Phitrust expressed uncertainty about the valuation of the remaining Vivendi entity, while CIAM argued that the spinoff was detrimental to minority shareholders’ interests. The restructuring also raises questions about Bolloré’s influence, as the spinoffs could allow him to increase his ownership stake in the separated companies without triggering mandatory takeover offers under certain jurisdictions’ regulations.
Conclusion: A Pivotal Moment for Vivendi
The shareholder approval of the spinoff marks a significant turning point for Vivendi. While the move aims to unlock value and foster growth for the individual businesses, the long-term success of this strategy remains to be seen. The performance of Canal+, Havas, and Hachette as independent entities, along with the market’s reaction to the restructured Vivendi, will be crucial in determining the ultimate outcome of this transformative decision. The coming months will be critical in assessing whether this strategic shift delivers on its promise of enhanced shareholder value and a brighter future for all involved.
