French media conglomerate Vivendi announced on Thursday that it is considering a strategic move to split itself into three independent listed companies, driving up its share price. This proposed restructuring would involve dividing Vivendi into public relations and advertising company Havas, filmmaker Groupe Canal+, and an investment company that would retain control over its majority stake in publishing business Lagardère Group.
The news of Vivendi’s plans resulted in a 7% surge in its Paris listed shares, building on an 8% increase over the past year. The objective of this strategy, according to Vivendi, is to enhance its valuation, which has faced challenges in recent years. One factor contributing to this decline was the decision to spin off its highly profitable subsidiary, Universal Music Group (UMG), through an initial public offering on the Amsterdam Euronext stock exchange in 2021.
Vivendi specifically pointed out that since UMG’s distribution and listing, it has faced a significant discount as a conglomerate. This discount has substantially reduced its valuation and hindered its ability to pursue external growth opportunities for its subsidiaries. With the separation into three distinct entities, Vivendi believes it can unlock the full development potential of each division. Furthermore, the company highlights that all three divisions are currently experiencing strong growth, benefiting from multiple investment opportunities on the international stage.
Investors have previously expressed concerns about a lack of synergies within Vivendi’s diverse business portfolio. However, if this split were to remove the conglomerate discount, JP Morgan analysts predict that Vivendi’s share price could potentially increase by approximately 50%, reaching €13 ($14) per share.
Overall, Vivendi’s plan to transform itself into three separate listed companies demonstrates its commitment to maximizing the value of its assets and capitalizing on growth opportunities in the market.
Restructuring at Vivendi: Potential Opportunities for Bolloré SE
JP Morgan analysts, led by Daniel Kervan, have recently suggested that a split within Vivendi could present advantageous opportunities for French billionaire Vincent Bolloré and his family-owned company, Bolloré SE. By dividing the conglomerate into three separate entities, it would become easier for Bolloré to increase his stakes in these companies for smaller amounts of money.
Bolloré SE initially invested in Vivendi back in 2011 and eventually amassed a controlling stake of 30% in the conglomerate. Should the split occur, Bolloré SE, which currently holds the highest share in Vivendi, would retain 30% ownership in all three newly established companies.
As a result of Bolloré SE’s significant stake in Vivendi, Vincent Bolloré assumed a position on the board and later became the company’s chair in 2014. However, he stepped down from this role in 2019. The current chair of Vivendi is Vincent Bolloré’s son, Yannick Bolloré, who also serves as the CEO of Havas.
Given the circumstances, it is highly likely that Bolloré’s focus would shift towards Canal+, which currently stands as Vivendi’s primary source of revenues and profit, as suggested by JP Morgan analysts.
The plans for a potential split arise shortly after Vivendi successfully completed its acquisition of Lagardère Group, a move that added publishing house Hachette to its expanding portfolio.
In a related development, Lagardère announced that Yannick Bolloré will be joining its board of directors.
The proposed restructuring at Vivendi presents an interesting opportunity for Vincent Bolloré and Bolloré SE. It would ultimately allow them to consolidate their influence and potentially expand their positions within the newly-formed companies.
