Vivendi is holding a Capital Markets Day for Canal+ today, ahead of next month’s shareholder vote on spinning off the TV business from the French holding company.
The vote on 9th December will determine the separation of Havas, Louis Hachette Group and Canal+, which would debut on the London Stock Exchange on 16th December. Today’s meeting will see the TV group lay out its strategy as a publicly traded company, following its supplementary prospectus published last week. This includes financial forecasts and incorporates earnings from MultiChoice, the South African pay-TV firm set to be acquired by Canal+ when granted regulatory approval.
The company forecasts Canal+ revenue growth for 2024 to fall broadly in line with 2023. But the broadcaster warned that 2025 revenues will be negatively impacted by the discontinuation of its free-t0-air channel C8, as well as the termination of “onerous third-party content contracts in France.”
There are brighter signs in the medium-term however, projecting moderate revenue growth and improved Adjusted EBIT as assets transferred from Vivendi start to turn a profit. Cash flow is also expected to return to 2023 levels in 2025, after falling to an “exceptional low level” this year. And the MultiChoice takeover is forecast to drive revenues alongside “potential significant cost synergies”, according to Vivendi.
A split vote
Vivendi’s main shareholder, French billionaire Vincent Bolloré, will hope the update encourages shareholders to vote for his break-up plan next month. The move is intended to boost the media company’s share price, which has fallen around 20 percent over the last three years. Vivendi claims to have “endured a significantly high conglomerate discount, substantially reducing its valuation and thereby limiting its ability to carry out external growth transactions for its subsidiaries.”
The break-up plan would see Canal+ listed in London, advertising group Havas in Amsterdam, and Louis Hachette (Vivendi’s publishing and distribution assets) in Paris. Havas is also holding a Capital Markets Day tomorrow, and expects revenue growth between -1 and 0 percent for 2024, before climbing above 2 percent in 2025.
However, resistance to the plan has emerged in the last few weeks. CIAM, a French assets management company and shareholder in Vivendi, has called for fellow shareholders to vote against the motion on 9th December, claiming the split is designed for Bolloré to increase his control over Vivendi’s holdings. “These three demergers on foreign markets will not close the discount,” said CIAM co-founder Anne-Sophie d’Andlau. “They represent an extreme case of where minority rights are being undermined.”
But Vivendi’s leadership maintains that the move is in the best interests of shareholders, pointing to the contribution of Canal+ in its nine-month earnings, which saw Vivendi revenues rise 4.5 percent YoY. “These performances confirm the strength of our main businesses and their capacity to become independent if the Shareholders’ Meeting convened on Dec. 9 2024 approves the group’s proposed split project,” said Vivendi Chairman Yannick Bollore and CEO Arnaud de Puyfontaine.
