2024-07-22 16:37:00
The flagship index of the Paris stock market, the CAC 40, is about to lose one of its historic values. The Vivendi group’s split project, expected by the markets and promised by the controlling shareholder Vincent Bolloré, should result, according to a press release from the group, in the listing of its main assets in London (Canal +) and Amsterdam (Havas). It should be recalled that Vivendi had already chosen the Netherlands to list its subsidiary Universal Music Group (UMG) during a previous split in 2021.
The publishing activities will remain listed in Paris, as will the Vivendi holding company, which will be transformed into a portfolio management company. The idea is to reduce Vivendi’s “holding discount” by valuing the various activities as best as possible, particularly in relation to its international peers.
“This Vivendi project raises several questions, including whether or not it is a heritage choice of the Bolloré family. I do not see why these assets will be better valued in London or Amsterdam.”reacts Olivier de Guerre, president of the management company Phitrust.
The two subjects of TotalEnergies
Obviously, this announcement of a dual listing on foreign exchanges refers to the emotion aroused last May when Patrick Pouyanné, CEO of the oil group TotalEnergies, had mentioned thoughts about a possible listing in New York. The manager had then clearly raised two subjects. The first concerned the impressive valuation gap, between 40 and 60%, between the French group, which is nevertheless one of the best managed in the sector, and its American competitors. A valuation gap also put forward by Vivendi to justify a listing in London.
The second TotalEnergies topic concerned the “disenchantment” of the French and Europeans with his company and the rise of American shareholders (47% of institutional investors, or about 35% of the capital). In essence, the manager expressed his “fed up” with public authorities always tempted to “overtax”. Even a Senate committee had put forward the idea of ” golden share ” allowing the State to oppose certain decisions, such as the relocation of the headquarters. Not to mention the recent decision of the Paris Court of Appeal to rule admissible the legal action of NGOs on the climate.
General outcry
The proposal from the CEO of the oil major has in any case sparked a general outcry in the political class – the Minister of the Economy, Bruno Le Maire, had even judged the idea ” very serious “ – and intense debates in business and financial circles had broken out. However, it was only a project, which also only involved a dual listing, in Paris and New York, while maintaining the headquarters in Paris. The Alcatel group had also opted for a dual listing at the time of its splendor at the turn of the 2000s. A decision then hailed at the time as a national pride!
Since the 1970s, public authorities have continued to promote “champions” and this ambition has now been largely achieved. 75% of the CAC 40’s activity is generated abroad and foreign investors hold more than 40% of the capital of these companies on average (and this despite the weight of certain large families, such as Dassault or Arnault). But today, the competition between the markets highlights the strengths and weaknesses of each.
“Valuations and liquidity are higher on the American market than on European markets, which remain fragmented (…). These announcements (by TotalEnergies, Editor’s note) are a strong incentive to continue to work very actively so that Europe can put itself in a position to have more efficient capital markets.”said Marie-Anne Barbat-Layani, president of the Financial Markets Authority (AMF), during the presentation of her annual report last June.
Listing place or registered office
The choice of Amsterdam over Paris is surprising, barely a month after the adoption of the law on financial attractiveness which institutes the double voting right in France. It is like a snub to a measure considered flagship by the promoters of the law but also by the regulator. This decision can however be explained by a more closed governance in the Netherlands. In particular, directors are not revocable by the general meeting of shareholders and it is the board that decides on the allocation of shares with multiple voting rights.
“The issue is not the listing location but the possibility for a group like TotalEnergies to transfer its headquarters overnight anywhere in Europe”estimates Olivier de Guerre. Already, several CAC 40 groups have their headquarters abroad, such as Stellantis, Airbus, ArcelorMittal, STMicro or Solvay.
If we adhere to the principles of shareholder democracy, it would take very little for the effective power of these large groups to slip into other foreign hands. “Few people have yet understood that changes in the capital of large groups will not be without consequences on governance,” warns a major local banker.
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