Indonesia pay-TV operator PT Media Nusantara Citra, which owns MNC Vision Networks – a pay-TV platform which Vivendi was reported to be looking to acquire – suffered a stock sell-off of 25 per cent on June 17th , and bounced back 15 per cent on June 19th, and consequently a net 10 per cent drop overall since the weekend.
The volatility was based on assorted reports that talks with Vivendi had failed as MNC is now proceeding with an IPO of its own.
Meanwhile, investment bankers see this as a “small positive” for Vivendi stock.
However, Vivendi had been reported to be a potential bidder since reports on December 10th 2018. The deal had been seen as another drain on the potential proceeds from proceeds from the sale of UMG, and thus reducing scope for cash returns to investors.
For example, equity analysts at Deutsche Bank recently asked whether Vivendi would “squander [its cash-in-hand] on misguided acquisitions? Or will Vivendi return the majority of cash? Investors are concerned it will be the former. We believe the latter.”