Vivendi (VIVHY) -) shares jumped after the French media conglomerate said it was considering splitting itself into three businesses.
Shares of the Paris company were up 8.1% to $9.68 at last check.
The announcement comes two years after Vivendi spun out Universal Music Group (UNVGY) -) in an initial public offering that handed 60% of the share capital to its shareholders.
"Since the distribution and listing of Universal Music Group in 2021, Vivendi has endured a significantly high conglomerate discount, substantially reducing its valuation and thereby limiting its ability to carry out external growth transactions for its subsidiaries," the company said in a statement.
A split would allow Vivendi to “fully unleash the development potential of all its activities,” the company said.
Proposed new Vivendi structure
One business would be structured around the company’s film and TV producer, Groupe Canal+, which Vivendi said reaches a subscriber base of over 25 million in nearly 50 countries.
Another business would be structured around Havas, the advertising and communication firm, which Vivendi said has maintained a steady pace of targeted acquisitions over the past two years.
The third entity would be an investment company, which includes a majority stake in the Lagardère group, a publishing and travel retail company.
The investment company would actively support the strategic development of its portfolio companies and would focus on value creation and capital return to its shareholders, Vivendi said, "through an effective portfolio rotation and a targeted reinvestment policy."
"This project will have to prove its added value for all stakeholders and include an analysis of the tax consequences of the various contemplated operations," Vivendi said.
Vivendi recently finalized the takeover of Lagardère. The move added book publisher Hachette and a travel retail business focused on transportation hubs to the Vivendi portfolio.
The company had to overcome multiple legal hurdles in its bid to acquire Lagardere. These included securing EU antitrust approval by selling publishing unit Editis to IMI and its stake in lifestyle magazine Gala to Prisma Media, Reuters reported in October.
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