Vivendi needs more time to clarify strategy for new 'galaxy' of companies, analysts and investors say

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By Gianluca Lo Nostro, Florence Love and Paul Sandl

GADANSK/PARIS/LONDON (Reuters) – Management of Vivendi and some of its newly challenged companies – Canal+, Havas and Louis Hachette Group – need to be clearer about their strategies to convince investors that the split is worth it, analysts said. And investors said.

In December, the Bolloré family-backed racecar split Vivendi into four multibillion-euro companies to unlock value, with the French media conglomerate’s total market capitalization estimated to be less than the sum of its parts.

But some independent companies have had a poor start, partly due to a lack of strategic information, some disappointing financial guidance and uncertainty over pay-TV group Canal+’s acquisition of broadcaster Canal+, analysts and investors said.

Shares in Vivendi’s newly listed businesses fell below their pre-dividend value in their first month of trading, dashing the Bollor family’s hopes of increasing value.

Only Louis Hachette’s shares are above their list price, and Vivendi is trading above its previous closing price before the split, as adjusted by stock exchange operator Euronext.

The combined market capitalization of the four companies was 7.7 billion euros ($7.92 billion), based on LSEG data as of Jan. 17. Before the breakup, Vivendi was worth about 8.3 billion euros, based on LSEG data.

Canal+ listed in London, advertising agency Havas launched in Amsterdam and Louis Hachette Group listed in Paris.

The largest company, Canal+, has seen its shares fall 31 percent since December 16.

According to Francois Gord, an analyst at Enders Analysis, it was impossible to split the group across all companies at a good point in the cycle, and Boy+ suffered because the South African deal had not yet closed.

“Now they’re taking their time to explain their business,” he said, referring to Canal+.

After a few quarters of results, the market will have a clearer view of the second half of 2025, he said.

Havas and Louis Hachette reported their full-year results on March 5 and February 13, respectively. Canal+ has not yet set a results date.

Representatives for Vivendi, Canal+, Havas and Louis Hachette, as well as the Bolloré group, declined to comment.

Analysts at UBS said last month that the division had failed to create value on its first day, adding that the path to shareholder returns was unclear on Canal+.

He attributed the sell-off in Canal+ shares to financial guidance falling short of investor expectations and a lack of dividends.

Analysts also have some doubts about the broadcaster’s acquisition of South African broadcaster Multichoice, adding that the deal, including clarity on the path to profitability, is not expected to close.

“We don’t know exactly what will happen,” said Jean-Michel Salvador, an analyst at French equity research firm Alpha Value. So people are careful,” he said.

Analysts said some shareholders had shed their shares in London-listed Boy+ because the company was not eligible to join certain indices or because some investors were prevented from holding shares traded in sterling.

Minor opposition

Some minority shareholders, including activist funds CIAM and Fittrust, have opposed the split, arguing that the split would deprive investors of the protection of French stock market rules.

Bolloré’s holding company owns more than 30% of each of the spin-offs, which previously required a mandatory discount for all shares under French law. But this does not apply to the new bodies.

Fairtrust founder Dennis Branche said it would take two months to get a better picture, but now he doesn’t believe the tiny Vivendi holding company can match the conglomerate’s long-term offer.

“The market (now) considers Vivendi as a financial one, so this discount will always be there,” he told Reuters.

Vivendi and Yannick Bollore, chairman of Vivendi’s supervisory board and son of Vincent Bollore, rejected claims by activist shareholders that the split would deprive minority shareholders of protection. Vivendi said the dividend had been approved by shareholder advisory firms.

Last month, Barclays Havas said it was trading at a discount to peers because of a governance structure that prevents board changes and hostile takeovers, and that is deterring some investors.

Stephane Le Gall, fund manager at Arcea Asset Management, another minority shareholder in Vivendi, told Reuters they were awaiting a review of the four stocks while the firms explained their respective strategies.

“Let’s be patient, Vivendi Galaxy is the story of 2025, not December 2024,” he said. The fund he manages currently has all the shares in different entities.

($1 = 0.9724 EUR)

(Reporting by Gianluca Lo Nostro in Gdansk, Florence Love in Paris, and Paul Sandle and Amy-Jo Crowley in London. Writing by Josephine Mason and Jane Merriman.)