Equities

Canal+ Eyes London Listing, Vivendi Shares Jump 6.3%

Canal+ considers London listing, shares surge 6.3%, potential spinoff by year-end.

By Bill Bullington

7/11, 11:10 EDT
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Key Takeaway

  • Vivendi's Canal+ is exploring a potential London listing, boosting Vivendi shares by 6.3% to their highest since June 2022.
  • Canal+ has expanded internationally with investments in Viaplay and Viu, and proposed acquiring South Africa’s MultiChoice Group Ltd.
  • The UK M&A activity is surging, driven by cheap valuations and political stability, with notable deals including Carlsberg's £3.3 billion acquisition of Britvic.

Canal+ Potential London Listing

Vivendi SE’s Canal+ is considering a potential listing on the London Stock Exchange, according to sources familiar with the matter. The French media conglomerate, controlled by billionaire Vincent Bolloré, is working with advisers including BNP Paribas SA on the spinoff of the broadcaster. The listing could occur as soon as the end of this year, although deliberations are ongoing, and no final decisions on timing and venue have been made. Other listing venues, such as Amsterdam, are also being considered. Representatives for BNP Paribas and Vivendi declined to comment, while a representative for Canal+ did not immediately respond to requests for comment.

Shares of Vivendi surged as much as 6.3%, reaching their highest level since June 2022 following the Bloomberg News report. Vivendi has been studying a plan to split into four listed units to extract better value from its assets, which include pay-TV, advertising, music, and publishing. The proposal would create standalone listings for Havas and Vivendi’s publishing arm, in addition to Canal+. Vivendi previously listed its most valuable business, Universal Music Group NV, in Amsterdam in 2021. The stock has since risen 9%, valuing it at about €50 billion ($54 billion), significantly higher than Vivendi’s €11 billion market value.

Canal+ Business Expansion

Canal+ has evolved from a French TV channel into a studio that creates entertainment content and a distributor of third-party channels and platforms such as Bein Sports, Netflix, and Disney+. The company has 26.4 million subscribers in more than 50 countries. Its revenues rose 4.3% to €1.5 billion in the first quarter, accounting for about 36% of Vivendi’s total revenue. London is seen as a more attractive listing destination for Canal+ as the broadcaster becomes more international. The company has been expanding into new markets, with investments in Swedish player Viaplay Group AB and Hong Kong-based streamer Viu, which focuses on Asia and the Middle East. Canal+ has also proposed acquiring South Africa’s MultiChoice Group Ltd., the continent’s largest pay-TV company.

For London, a major listing like Canal+ would be a much-needed victory after a drought of initial public offerings in recent years. The UK’s Financial Conduct Authority recently announced new rules for listings to attract more issuers to the city. The listing of Canal+ in London could help boost the city's status as a financial hub, especially after losing major names like chip designer Arm Holdings Plc to New York.

UK M&A Activity

The UK is set to see another wave of mergers and acquisitions (M&A) in the second half of the year as dealmakers hunt for targets in one of the world’s cheapest equity markets. British companies represented more than 60% of the names mentioned as the most likely M&A targets, according to an informal survey of 14 European risk-arbitrage desks, traders, and analysts conducted by Bloomberg News in June. This includes names such as food delivery platform Deliveroo Plc, electronic retailer Currys Plc, and engineering specialist Dowlais Group Plc. The pick-up in UK deals this year has been driven by cheap valuations, with the UK stock market now trading at a 42% discount to the MSCI World. The deal volume is almost double compared to last year, with political stability from the new Labour government likely to further support the M&A spree.

Foreign bidders have been active in the UK over the last few months. Carlsberg AS agreed to buy soft drinks producer Britvic Plc for £3.3 billion (€3.9 billion) this week. Other companies like Royal Mail owner International Distribution Services Plc, cybersecurity firm Darktrace Plc, packaging giant DS Smith Plc, and logistics business Wincanton Plc have also been snapped up or accepted offers this year. Chris Forgan, portfolio manager at Fil Investment Management Limited, anticipates foreign capital will flow back to the UK following greater political stability after Labour’s landslide victory in the July 4 election. “A level of optimism has also returned to the M&A sector,” Forgan said. “Corporates are looking to take advantage of this, and deals are happening at attractive premiums.”