The French media conglomerate Vivendi has proposed splitting into three separate businesses, which would be listed separately. This would be a major revamp led by Vincent Bollore.
The Paris-based firm said that it had begun working with bankers to assess the feasibility of a similar plan. It said this was intended to maximize its value.
It said that ” Vivendihas suffered a significant conglomerate discount which has reduced its valuation, thereby limiting the ability of its subsidiaries to conduct external growth transactions.”
“To fully unlock the development potential of its all activities. . . [The group] will explore the feasibility of splitting the company into multiple entities.”
This announcement comes just two years after Vivendi spun off Universal Music Group through a massive initial public offering, which returned 60 percent of its share capital to shareholders. The shares of the remaining group, which was hived-off Vivendi’s most valuable division, have been underperforming since the transaction. This has led the group to seriously consider a break-up.
The announcement is a surprise, coming only weeks after Lagardere was acquired by the group. This acquisition added Hachette, a travel retailer focused on transportation hubs and Canal+ to the Vivendi group’s portfolio.
It is a sign of how Bollore despite no longer being the chair, a corporate raider who invested in Vivendi back in 2011 continues to make changes in the group he still effectively leads. He controlled the group, with just over 30 percent of the shares. He sold video games, telecom assets and then folded another company, the advertising agency Havas in 2018.
In 2018, he was replaced as chairman by his son Yannick, but informally, the patriarch continues to set strategy.
Investors and Vivendi have long complained about the lack of synergies and cohesiveness between Vivendi’s operating businesses. Yannick Bollore has been working to improve this situation ever since his father retired officially in 2022. He told earlier that Vivendi wanted to show it was a “coherent company, not a disparate group of holdings”.
The group stated that if the breakup went ahead, Vivendi would separate its biggest business, Canal+. This is the main source of income and profit for the company.
Vivendi then planned to create a third listed company as an investment firm that would include Lagardere, and other listed and non-listed media and entertainment holdings.
The implications of the split will take time to be studied, bringing with it a period in which uncertainty is likely to reign. Vivendi stated that the project needs to prove its worth to everyone involved and include a tax analysis of the planned operations.
Vivendi shares have fallen by 15 percent since UMG spun off the company in September 2020, a far cry from the 18 percent rise of the French blue-chip CAC 40.
UMG’s shares have increased by approximately 9% since it started. STake Vivendi has in the company is 28%.The stock market values Vivendi at nearly €47bn, while a smaller version of Vivendi is valued at just over €9bn.