By Joe Wallace and Quentin Webb
Entertainment conglomerate Vivendi put on a big show for investors across Europe. Critics weren't dazzled.
The French company, which traces its origins to a Lyonnais water utility, is syonymous with dealmaking over recent decades. It counts billionaire industrialist Vincent Bolloré as its biggest shareholder.
Vivendi decided this fall to split in four. Shareholders approved the plan this month, and shares in the three companies Vivendi span off started trading on Monday. For every Vivendi share they owned, investors got one share each in the demerged companies.
The market's initial verdict: meh.
-- Vivendi stock shot up in Paris. The company now focuses on gaming through subsidiary Gameloft and has minority stakes in Universal Music, online-betting company Banijay and various media and telecom companies.
-- Publisher Louis Hachette's shares also rose in the French capital, while advertising and communications company Havas advanced in Amsterdam.
-- But television division Canal+, the company behind the Paddington Bear films, sank in London.
-- An investor who kept hold of all four stocks wouldn't be much better off than they were when Vivendi's shares closed Friday.
Executives hope investors, over time, will assign the four companies a higher overall value than they did to Vivendi.
The spinoffs are another step toward breaking up a once-powerful force in the entertainment business. Within six years in the 1990s, then-Chief Executive Jean-Marie Messier turned water company Cie. Generale des Eaux into Vivendi Universal, owner of Universal Studios and a clutch of other media and telecom assets.
The dealmaking continued even after Messier left. For instance, in 2008, Vivendi's gaming unit combined with Activision to create Activision Blizzard. Vivendi later sold out of the gaming company, which makes World of Warcraft. In 2021, it span off Universal Music, the music label of stars such as Taylor Swift.
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(END) Dow Jones Newswires
December 16, 2024 09:26 ET (14:26 GMT)
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