Paris, France - In a strategic move aiming to unlock greater value from its diverse portfolio, French media conglomerate Vivendi SE, with a market capitalization of approximately R212 billion, is set to embark on a groundbreaking journey of splitting into four distinct listed units. This transformative decision comes as Vivendi seeks to capitalize on its expansive assets, ranging from pay-TV to advertising, music, and publishing.
Vivendi's Chairman, Yannick Bolloré, revealed in an exclusive interview with Bloomberg on Thursday that the company is poised to engage in consultations with investors and employees regarding the proposed split. Bolloré emphasized the multifaceted nature of the discussions, which will delve into crucial aspects including tax considerations, legal ramifications, and financial implications.
The catalyst behind this strategic maneuver lies in Vivendi's quest for enhanced shareholder value. Since the listing of its most lucrative business entity, Universal Music Group NV, the company has grappled with a stagnant stock price, constraining growth prospects for its subsidiaries. Bolloré estimates that the company's discount to the value of its constituent parts stood at a staggering 40% to 45% before the announcement of the split plan.
Market analysts, including Jerome Bodin from Oddo, have projected valuations for the segmented units following the split. Canal+, the prominent pay-TV group within Vivendi's portfolio, could potentially command a valuation of approximately €6.1 billion, while Havas, the advertising agency, might see a valuation around €3 billion. Furthermore, the investment structure holding stakes in Universal and Telecom Italia SpA could fetch a valuation of about €4.9 billion.
Despite the promising prospects, Vivendi's stock experienced a marginal decline of 2% to €10.05 in Paris following the announcement, underscoring investor skepticism and market volatility. However, Bolloré remains undeterred, contemplating various options for the split, including potential listings outside of Paris.
Under the proposed split, Vivendi intends to carve out four distinct entities:
1. Pay-TV group Canal+: Serving as the cornerstone of Vivendi's operations, Canal+ contributes significantly to both sales and earnings. With a robust revenue of €6.1 billion and €525 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2023, Canal+ remains a formidable force in the media landscape.
2. Ad agency Havas: Renowned for its prowess in the advertising domain, Havas is poised to emerge as a standalone entity, leveraging its expertise and market presence to drive growth and innovation.
3. Publishing arm including Lagardère: Vivendi's publishing arm, encompassing Lagardère, represents a vital component of its diversified portfolio, poised to thrive independently in the ever-evolving media ecosystem.
4. Investment vehicle encompassing stakes in Universal and Telecom Italia SpA: This strategic investment vehicle underscores Vivendi's commitment to fostering partnerships and exploring lucrative opportunities in the global media arena.
Amidst this transformative phase, Vivendi's expansion endeavors have garnered significant attention, particularly its recent bid for South Africa's MultiChoice Group Ltd. The proposed acquisition aims to bolster Canal+'s footprint in new markets, facilitating its ambitious goal of reaching 50 million subscribers worldwide.
Yannick Bolloré articulated the significance of broadening Canal+'s subscriber base to optimize content distribution on a global scale. With 26.4 million subscribers as of 2023, the acquisition of MultiChoice represents a pivotal step towards achieving this strategic imperative.
Moreover, investors remain vigilant regarding Vincent Bolloré's potential endeavors to augment his stake in Vivendi, thereby exerting greater influence over the company's trajectory. If the split materializes as envisaged, the Bolloré family stands poised to wield considerable influence as controlling shareholders across various media entities, empowered by the divestment of Bollore SE's transport and logistics business.
As Vivendi embarks on this transformative journey, stakeholders await eagerly to witness the unfolding of a new chapter in its storied legacy, marked by innovation, resilience, and unwavering commitment to unlocking shareholder value amidst a dynamic media landscape.
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