Canal+ shares drop on London trading debut after split from Vivendi

An initial decline was to be expected, said analysts, as certain investment funds were restricted to French-listed stocks.

The French media company Canal+ saw its share price drop by more than 20% on Monday as the firm made its debut on the London Stock Exchange.

From an opening price of 290p, shares had fallen to around 221p at around 13h30 GMT – before creeping upwards again to around 234p in the afternoon.

Canal+ is one of three businesses splitting off from parent company Vivendi, owned by French billionaire Vincent Bolloré.

Smaller breakaways Havas and Louis Hachette, listed in Amsterdam and Paris respectively, showed gains on Monday.

Havas is an advertising firm while Louis Hachette is a publisher.

The listings feed into a long-term plan by Vivendi to boost the worth of the subsidiaries, which it argues have been undervalued as part of the larger group.

Vivendi won’t retain stakes in either Canal+, Havas, or Louis Hachette, although Bolloré Group, which owns almost a third of Vivendi, will hold a 30.6% stake in each.

Volatility expected

Analysts claim that Canal+’s initial drop is not unusual and that its valuation should improve over time.

“Volatility was expected as certain investment funds which held Vivendi may be restricted to French-listed stocks and so they are forced sellers of Canal+,” said Russ Mould, investment director at AJ Bell.

He added: “It’s common for demerged stocks to experience share price wobbles in the first few days as a standalone listed company as investors who inherited the stock decide if they want to stay or go.”

Before the listing, JPMorgan analysts estimated Canal+’s worth at around €6bn. They valued Havas at €2.5bn and Louis Hachette at around €2.2bn.

UBS, on the other hand, valued Canal+ at around €3bn.

London’s global standing

Canal+ is the largest firm to list in the UK since rules changed in the summer, intending to make the LSE more competitive.

The stock market is currently on course for its worst year since the global financial crisis.

Eighty-eight firms have delisted or transferred their primary listing from London’s main market this year, replaced by only 18 incoming companies.

Last Friday, CEO of Canal+ Maxime Saada and finance chief Amandine Ferré met UK Chancellor Rachel Reeves to discuss the attractiveness of the LSE.

“I’m delighted that Canal+ has chosen the UK. Their decision is a vote of confidence in the UK’s capital markets, the stability we are delivering and our plan for change,” said Reeves.

Saada told the FT last month that Canal+ was listing in London due to the large pool of international investors on offer, as well as the UK’s strong position in the media industry.