Vivendi, the French media conglomerate that owns television broadcaster Canal Plus and advertising agency Havas, says it may split itself into three different companies in order to unlock better opportunities for growth.
The consideration comes after Vivendi said it recognized that the broader financial market was discounting the mass media company based on the combined value of its various businesses, which also include the publishing firm Lagardère, streaming service Dailymotion and live venue company Vivendi Village.
Despite its Canal Plus, Havas and Lagardère subsidiaries seeing growth in overseas markets, Vivendi said its other businesses were weighing down the valuation of the overall company, especially following its sale of Universal Music Group two years ago.
“Since the distribution and listing of Universal Music Group in 2021, Vivendi has endured a significantly high conglomerate discount, substantially reducing its valuation and thereby limiting its ability to carry out external growth transactions for its subsidiaries,” a spokesperson for the company wrote in a statement last Wednesday.
If Vivendi moves forward with a split, the plan would likely call for the creation of three separate companies, each of which would be listed on the stock market, Vivendi said.
The three companies would include Canal Plus and Havas, which would operate its businesses along the same lines as the current subsidiaries. The third company would be an investment firm “with listed and unlisted financial stakes in the cultural, media and entertainment sectors,” to include a majority stake in Lagardère, Vivendi said.
“This split project would provide all the entities with the human resources and the financial agility necessary for their development,” a spokesperson said on Wednesday. “This project will have to prove its added value for all stakeholders and include an analysis of the tax consequences of the various contemplated operations. To conduct this study, Vivendi will be assisted by its usual banks and advisors.”
The plan has been brought to the Supervisory Board of the company by its Management Board for consideration, and Vivendi said it will update the public on the matter “in due course,” though no specific timeline was offered.
Vivendi’s stock price shot up more than 8 percent in the 24-hour period after the announcement was made. On Monday, its stock closed around €9.50 (around U.S. $10.39) on the EuroNext Paris stock exchange, or 0.3 percent lower compared to the previous trading day.
