Unless there is a dramatic turn of events at the Folies Bergère, the dislocation will indeed take place. It is in this legendary room in the 9th arrondissement of Paris, owned by Lagardère, that the destiny of the Vivendi group will be played out on Monday, December 9, during an Extraordinary General Meeting. On the agenda, nothing less than the split into four entities of the conglomerate of which the Bolloré group is the largest shareholder. Ambition proclaimed by management: reduce the discount – that is to say, boost the stock price so that it is more in line with the real value of the assets, namely Canal +, Havas and Louis Hachette – which houses Lagardère and Prisma. Rich idea at first glance.
Except that for the Paris market, this breakup is a hard blow. Because the group has chosen to export two of its companies internationally. Canal +, the big piece, will be listed on the London Stock Exchange. The Havas advertising company, for its part, will fly to Amsterdam. Louis Hachette will remain in Paris, but in a less restrictive segment, Euronext Growth. All that will remain, on the regulated market of Euronext Paris, are the residual pieces of Vivendi: a portfolio of shares estimated between 6 and 7 billion euros (UMG, Telecom Italia, Banijay, etc.) and the video game publisher Gameloft. Goodbye to the CAC 40. It is very likely that the scientific committee – the wise, independent people who decide on the composition of the major Euronext indices – will overturn Vivendi during its next quarterly review, on December 12.
The group is “shopping” in stock market regulations
Although complex, this split operation was carried out smoothly. The first communication around the project dates from December 2023 – it was also well received by the market. “I think they accelerated the work after the dissolution. The announced timetable initially suggested a horizon of 12 to 18 months. One year will ultimately have been enough,” notes Andrzej Kawalec, general director of the management company Moneta AM. The political and fiscal uncertainty in France will have precipitated things. On December 16, barring any surprises, the project will be implemented. And will remain in the throat of certain shareholders, unconvinced by the company’s arguments. An asset manager summarizes the maneuver as follows: “This operation, under the guise of creating value for Vivendi’s minority shareholders, in fact benefits the Bolloré group and its shareholders. The chosen listing places will cause massive sales of “The Bolloré group will be able to take advantage of this to strengthen its participation at a lower cost and take control, without a takeover bid.”
For its part, Vivendi argues that the choice of London for Canal + is relevant, because “its competitors are Anglo-Saxon”. And adds that the media group is in the process of buying the South African MultiChoice, a pay TV operator. “Canal + is considering a listing in Johannesburg and the processes are similar to those in London,” argues a spokesperson. Regarding Havas, the intentions are very different. Vivendi intends here to want to “protect” the company chaired by Yannick Bolloré from a hostile takeover bid, which would scare away customers and “talent”. However, the Amsterdam financial center provides a foundation status allowing this defensive objective to be served. “Vivendi is carrying out a real shopping spree in terms of stock market regulations,” summarizes a good connoisseur of the group. The Holroyd law passed a few months ago, supposed to revive the financial attractiveness of France, will therefore not have been enough to retain this long-time tenant of the CAC 40.
Powerless slingers
“It’s a heavy precedent for the Paris market to let a company circumvent regulations and list elsewhere, whenever it suits them,” points out Catherine Berjal. The co-founder of Ciam, leader of the minority rebellion, will have carried the fight as far as possible. The activist fund contacted the AMF, appealed the decision which was unfavorable to it, and filed a request on the merits with the commercial court, arguing fraud against the law and abuse of rights. An adjournment of the AGM was even requested, in vain, Ciam receiving a fine of 100,000 euros in the process. His conviction? The Bolloré group de facto controls Vivendi, although it has a 29.9% holding. In other words, a hair away from the 30% threshold which would have required it to launch a takeover bid for the entire capital. Ciam’s speech was echoed by another management company, Phitrust. It is also supported by a voting advice agency, the French Proxinvest. On the other hand, to the surprise of some rebels, its American equivalents ISS and Glass Lewis, closely followed by investors, recommended approving the operation. With a sort of “better to hold than to run” argument: “In the absence of a superior alternative, […] for minority shareholders, a vote FOR the proposed spin-off plan, with all its governance shortcomings, appears to offer a better option […] than the status quo”, writes ISS.
On the stock market, Vivendi’s stock looks gloomy. And for good reason: index funds – which replicate the CAC 40 – and European funds – which do not invest in British stocks – have started to sell off. The price collapsed by almost 14% in three months, when the flagship index of the Parisian market only lost 1% over the same period. A decline which delights its main shareholder. In this affair which is not lacking, this is not the least of the paradoxes.
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