Canal+ valued at £2.6bn on London market debut

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Canal+, the French broadcaster spun out of France’s Vivendi, suffered a share price drop of more than 10 per cent on its market debut on Monday, becoming the largest new listing in London this year.

The company is the largest of the three businesses being spun out of Vivendi, the Paris-based group controlled by the billionaire Bolloré family, whose long-held complaint that the divisions were undervalued as part of the conglomerate will be tested by the split. 

Shares opened at 290p but traded at 258p soon after, valuing the group at about £2.6bn on its first day in London, lower than the valuation some analysts expect the company to reach in the coming months.

Company advisers argue that, over time, the company should trade at a valuation of more than €6bn, in line with internal valuations by Vivendi and analysts including JPMorgan.

The advisers have previously warned that the initial trading period for Canal+ will be rocky because funds that can only own shares in French companies will need to sell their stock, with some other investors expected to sell for tax reasons.

At this valuation, the company is smaller than British TV rival ITV, which is worth about £2.8bn, despite having annual revenues about a third larger. However, its UK rival reported adjusted earnings before interest and tax of €588mn, compared with €426mn for Canal+, for 2023.

The listing has been touted by UK chancellor Rachel Reeves as a “vote of confidence” in the London market, which is desperately seeking new listings at a time when more public companies are being acquired or moving their listings to the US.

London’s main market is on course for its biggest net outflow of companies since 2009. Close to 90 companies have delisted or transferred their primary listing from London’s main market this year with only 18 taking their place, according to data from the London Stock Exchange Group last week.

Shareholders in Vivendi have been given the same number of shares in the newly listed Canal+, meaning the Bolloré family holds about 30 per cent — the largest stake.

Chief executive Maxime Saada told the Financial Times last month that Vivendi had chosen London as a listing venue for Canal+ owing to its access to a larger group of international investors as well as the UK’s position as a leader in the media industry.

Vivendi, which will remain listed in Paris, is also listing the advertising company Havas in Amsterdam and its publishing division, Louis Hachette Group, in Paris.

Louis Hachette opened at €1.20 per share before rising by 25 per cent to €1.40 per share in early trading in Paris. Havas opened at €1.80 per share and rose 6.7 per cent to €1.91 in early trading in Amsterdam.

Analysts at JPMorgan had estimated Canal+ to be worth about €6bn, Havas €2.5bn and Louis Hachette around €2.2bn.

The break-up of Vivendi marks the shrinking of a company that has its roots in France in the 19th century, and that has evolved significantly since Vincent Bolloré took it over more than a decade ago.

He has whittled the group down, generating substantial returns for the family.

The split takes place as the billionaire, who ostensibly retired a few years ago but remains the key decision maker behind the scenes, masterminds a wider reorganisation of the family’s businesses that span transport, logistics, entertainment and media.