Phitrust against the demerger of Vivendi

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Vivendi’s spin-off project

In December 2023, Vivendi – the media conglomerate which is part of the French stock index CAC40 – announced a new spin-off project consisting of the listing of the Canal+ branch on the London Stock Exchange, the Havas branch on Euronext Amsterdam, and its publishing activities through a holding (named Louis Hachette Group) on the Paris Euronext Growth market. This threefold operation posed several governance and shareholder rights issues which in turn were bound to have a negative impact on the share prices. 
The proposed demerger enabled the Bolloré group – the reference minority shareholder controlling Vivendi – to strengthen its control over the three new listed entities without paying a control premium to other minority shareholders and bypassing the application of AMF (French Financial Markets Authority) protection rules (mandatory public offer for the remaining capital once the threshold of 30% of capital or voting rights is exceeded). 

Phitrust’s position

The potential impacts of Vivendi’s demerger were targeted by the French SfC member Phitrust. ‘In theory, a spin-off is intended to create value, but this value creation must actually be made possible. In this respect, the operation proposed to shareholders did not provide any certainty as to the value of the future group of listed companies’, said Phitrust. Furthermore, ‘this reorganisation does not respect equity between shareholders. It strengthens the control of the Bolloré group over each company without benefiting other minority shareholders. The whole operation was a way for Vivendi’s reference shareholder, the Bolloré group, to increase its control over Vivendi’s assets without buying any more shares’.

Phitrust’s public campaign

For all these reasons, Phitrust publicly campaigned for investors to vote against the spin-off resolutions. First, they had a one-on-one meeting with Vivendi’s IR and legal directors to share all the issues raised by the deals. They then published a press release explaining their position against the spin-offs and held a webinar for French professional investors, presenting the arguments against the spin-offs. The initiative received good press coverage.

At Vivendi’s AGM, on 9 December 2024, Phitrust reiterated its opposition by speaking at the meeting. Unfortunately, despite Phitrust’s public campaign throughout November, the AGM approved the demerger of the group into four separate entities with over 97% support. The very high approval rate for the resolutions – achieved with a 72% attendance rate – is partly due to the voting recommendations of the major proxy advisors (ISS and Glass Lewis) and the voting power of the Bolloré family (29.9%). 

Phitrust’s concerns about the share price were justified. Indeed, on 23 January, the combined market capitalisation of the four stocks (Vivendi, Canal+, Havas, Louis Hachette) was 14% lower than on the day of the IPO (16 December).

Phitrust’s engagement with Vivendi over the years

Phitrust has been a shareholder of Vivendi since 2003. As early as 2015, Phitrust submitted a resolution to maintain single voting rights and to request that the increase of the Bolloré group’s stake in Vivendi – and its de facto takeover – be carried out through a public offer. The resolution received more than 50% of the votes. Unfortunately fell short of the ⅔ of the votes required to amend the Articles of Association, thereby allowing the Bolloré group to take de facto control of Vivendi.