Vivendi (shareholder of Prisma Media, publisher of Capital), Bolloré, Compagnie de l’Odet… The shares of the Bolloré galaxy have been rising on the Paris Stock Exchange for several weeks. This Wednesday, however, they reacted well to the formalization He proposed a split from Vivendi : the media giant’s share price gains nearly 2%, while Bolloré and Compagnie de l’Odet are in the green. According to the split project currently under consideration, the distribution of Vivendi would be carried out into four independent entities (Canal +, Havas, the investment company and the media publishing distribution division that includes Prisma Media – Capitala is part of it – and Vivendi’s majority stake in the capital Lagardère) for listing he planned, and initially it was planned to be divided into three.
Proposed division Vivendi in four it seems to be underway a priori, although there are a number of steps to be completed (consultation with the employee representative bodies of the organizations concerned) and conditions to be met (regulatory permits, green light from bondholders and other lenders, Vivendi’s approval). shareholders). On the occasion of the publication of Vivendi’s 2023 accounts and the supervisory board meeting on March 7, 2024, the media giant will report on the progress of the divestment project.
Splitting Vivendi into 4 would allow the stock market to eliminate the conglomerate discount weighing on the stock.
The increase in the share prices of Vivendi and the main shareholder Bolloré is logical. In fact, Vivendi’s stock “it suffers a very heavy discount from the conglomerate, reducing its valuation significantly“, which management says makes it more difficult for its subsidiaries to make acquisitions. In fact, in theory, actions pure players (listed companies located in a single sector of activity) generally get a better valuation than conglomerates (with less legible and illiquid divisions) on the stock market. In the different divisions of Vivendi pure players therefore, this classic conglomerate discount (known as the holding company discount) could be mechanically eliminated.
Vivendi shares remain cheap, what’s the upside potential?
In light of this prospect, Société Générale maintains its buy recommendation on Vivendi shares, and raises its price target from 11.90 euros to 12.50 euros (the estimated fair theoretical price for the share). A target that suggests a theoretical valuation of 19%. As a major shareholder, Bolloré should in theory be able to step forward in response to Vivendi’s action. Compagnie de l’Odet, Bolloré’s majority shareholder, should also benefit from the good health of Vivendi and Bolloré on the stock market. From a purely fundamental point of view, Vivendi looks relatively cheap on the stock market, as the group pays less than 13 times this year’s expected earnings, and the net financial debt at the end of 2023 should only be one year of operating margin. Before the planned amortization in 2024 (according to the consensus of financial analysts).
What does technical analysis say about Vivendi in the stock market?
From a technical analysis perspective only, Vivendi shares are currently in an uptrend and recently sent new bullish signals. The same with Bolloré and Compagnie de l’Odet. Momentum, Capital’s stock market investment letter, was able to spot perfectly timed buying opportunities in these stocks. Find our scenarios for these three values at Momentum. And learn about our expectations for the CAC 40 and stocks every day. Take advantage of a free one-month trial right now with promo code CAPITAL30J. To take advantage of it, click on the link below.