London listing for Canal+?
July 22, 2024
Vivendi’s Management Board has updated plans to split up the conglomerate into three in order to release value.
Under the plan, now with the Supervisory Board, the three operating companies would keep the decision-making centre of their activities, as well as their operational teams, in France: Canal+ and Havas, although listed outside of France, would remain French tax residents for French corporate income tax purposes.
- Canal+ would be listed on the London Stock Exchange to reflect the company’s international dimension, particularly as part of the ongoing combination with MultiChoice. With close to two thirds of its subscribers outside of France, a film and TV series distribution network present on all continents, and growth drivers resulting from its recent developments on the African, European and Asia-Pacific markets, a London-based listing would represent an attractive solution for international investors likely to be interested in the group. Canal+ would remain a company incorporated and taxed in France and would not be subject to mandatory stock market regulations on public offers in either the UK or France. Furthermore, Canal+, depending on the success of its public tender offer for MultiChoice, could be subject to a secondary listing on the Johannesburg stock market.
- Havas, with the majority of its activities being carried out internationally, would be listed as a Dutch public limited liability company (NV) on the Euronext Amsterdam stock exchange, which already witnessed UMG’s success. Havas NV would be subject to Dutch stock market regulations and adhere to the Dutch Corporate Governance Code. As a result, Havas would be in the best possible position to carry out its new global strategy, Converged, continue its solid growth as well as its strong commercial and creative momentum, and stabilise its share capital, ensuring its sustainability for its talents and clients. To this end, a Dutch legal foundation would guarantee the preservation of the group’s independence and identity, and multiple voting rights, initially double after two years of holding, then quadruple two years later, would be offered to long term committed shareholders, taking into account the length of time the Vivendi shares were held for the double voting rights.
- A newly named company, Louis Hachette Group, would bring together the assets owned by Vivendi in publishing and distribution, i.e., the Group’s 63.5 per cent shareholding today in Lagardère SA and 100 per cent of Prisma Media. This company would be listed on Euronext Growth in Paris, consistent with the continued listing of its subsidiary Lagardère SA on the regulated market of Euronext Paris.
In this configuration, Vivendi says it would remain a leading player within the creative and entertainment industries, listed on the regulated market of Euronext Paris. Vivendi would continue to develop and transform Gameloft and actively manage a portfolio of investments (foremost among them being UMG) in sectors familiar to its teams, while having the means and ambition to initiate new investments in related activities. Vivendi would also retain the minority interest it could acquire in Lagardère SA through the exercise of the transfer rights issued as part of the 2022 public tender offer, which remain exercisable until June 15th 2025. Vivendi would also provide a certain number of services to the three listed companies resulting from the split.
Since the distribution and listing of Universal Music Group (UMG) in 2021, Vivendi says it has endured a significantly high conglomerate discount, substantially reducing its valuation and thereby limiting its ability to carry external growth transactions for its subsidiaries. Canal+, Havas and Lagardère are currently experiencing strong growth in an international context marked by numerous investment opportunities. To “fully unleash” the development potential of all its activities, in December 2023, Vivendi initiated the feasibility study of a split project where Canal+, Havas and a company grouping the assets in publishing and distribution would become independent entities listed on the stock market.
To date, the study has demonstrated the feasibility of this project under satisfactory conditions and identified the most suitable stock exchanges for these three companies once separated from Vivendi, considering the nature of their activities and their international exposure.
All three of these companies would keep the decision-making centre of their activities, as well as their operational teams, in France: Canal+ and Havas, although listed outside of France, would remain French tax residents for French corporate income tax purposes.
A decision could be taken at the end of October 2024 with the aim of submitting it to an Extraordinary Shareholders’ Meeting which could be held in December 2024. This transaction would therefore only be carried out if it were to be approved, during this Shareholders’ Meeting, by a two-thirds majority of the shareholders. To date, no regulatory authorisations have been identified as being required for this project to be executed.
In line with the strategic plan aimed at enabling the Group’s different businesses to seize investment opportunities in future, post-split, Canal+ and Havas would have virtually zero net debt, with the exception of the debt put in place by Canal+ for the MultiChoice public tender offer. Louis Hachette Group would have no debt of its own except for Lagardère’s net debt of approximately €2 billion which has recently been refinanced. Following the split, Vivendi could have a net debt of around €1.5 to €2 billion.
Following the allocation of the shares of the entities resulting from the split, the Bolloré group would hold approximately 30.6 per cent of the share capital and voting rights of Canal+ and Louis Hachette Group. It would hold approximately 30.6 per cent of the share capital of Havas NV and could, due to the double voting rights, hold over 40 per cent of the voting rights. The implementation of this project is not expected to lead to the launching of a public tender offer for Vivendi or for any of its separated entities. The contribution of the majority stake of Lagardère SA’s share capital to Louis Hachette Group will be the subject of a request to the AMF for an exemption from the mandatory public tender offer requirement, based on a rationale specific to a split transaction.