Yahoo Finance Billionaire Bolloré Eyes Vivendi Breakup in Strategic U-Turn
(Bloomberg) -- French billionaire Vincent Bolloré is weighing a breakup of his sprawling media and entertainment empire, Vivendi SE, in a strategic reversal aimed at reviving the value of its businesses. The shares surged.
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Under the plan, the French conglomerate, which has a market value of about €10 billion ($10.9 billion), would be split into three: pay-TV arm Canal+; advertising and communications branch Havas; and a business that includes its majority stake publishing group Lagardère, the Paris-based company said in a statement on Wednesday.
Since listing its most valuable business, Universal Music Group, the French company said it has “endured a significantly high conglomerate discount,” cutting its valuation and limiting growth opportunities for its subsidiaries. The three separate entities could fetch a market valuation about 40% higher than where they’re currently valued, UBS analyst Adam Berlin said in a note on Thursday.
The strategy marks “a U-turn from the current strategy of seeking closer integration among its disparate collection of media assets,” Bloomberg Intelligence analyst Matthew Bloxham said. Vivendi had tried to create synergies between its activities, turning intellectual property such as Paddington Bear into films, books and marketing campaigns in an effort to build a European empire to rival Netflix Inc. and Walt Disney Co.
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Vivendi shares rose 7.7% to €9.65 at 12:44 p.m. in Paris trading. The shares earlier gained as much as 12%, the biggest intraday rise since Sept. 2021.
Pay-TV group Canal+ is the company’s largest unit, accounting for more than half of sales and earnings. Last year it generated about €5.9 billion of revenue and €515 million in earnings before interest, taxes depreciation and amortization. Havas came second, accounting for more than a quarter of the company’s revenue.
That could translate into valuations of about €6.1 billion for Canal+ and about €3 billion for Havas once split off from their parent company, Oddo analyst Jerome Bodin said. The investment structure holding the Lagardère stake could fetch a value of about €4.9 billion, he said.
Vivendi will tap its “usual” banks and advisers to study a potential breakup and any plan would need to bring value to all stakeholders and account for tax consequences, the company said. The company didn’t say when it would make a decision.
Investors have been watching to see whether Bolloré — Vivendi’s controlling shareholder, who’s been likened to fellow media mogul Rupert Murdoch — tries to raise his stake in the company to win greater control over the media business and take it in new directions. If the split goes through, Bolloré has a war chest to pursue further operations as a controlling shareholder of various media groups after the family’s investment vehicle, Bollore SE divested its transport and logistics business.
Known as a ruthless corporate raider, Bolloré worked to internationalize his media group over the past decade. Since taking control of Canal+ about eight years ago, Bolloré has made the once-struggling unit a Netflix-like platform by acquiring rivals in Europe, Africa and Asia.
Still, a split of Bolloré’s empire could call into question the family’s succession planning as the 71-year-old officially steps back from some of his businesses. Cyrille Bolloré, 38, currently leads Bollore SE, while his older son, Yannick Bolloré, 43, is the chairman of Vivendi.
--With assistance from Isabella Ward.
(Updates with breakdown of business valuations in from sixth paragraph. A previous version of this story corrected headline to show Vivendi is weighing a breakup)
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