In This Article:
Shares in French media giant Canal+ fell by 22pc on its first day of trading, dampening optimism around London’s biggest listing of the year.
Canal+, which is behind the Paddington film series, has been valued at £2.2bn after its shares fell to 226p – down from its opening price of 290p.
This is significantly lower than the €8bn (£6.7bn) that the company had hoped for the deal, which was borne from the break-up of parent company Vivendi.
The valuation also means Canal+ is smaller than British rival ITV, which is valued at £2.8bn.
However, bosses have argued that share price volatility is expected in the first few weeks of trading as some Vivendi shareholders sell off their holdings.
The Canal+ listing, which is the largest since the spin-off of GSK’s consumer healthcare business Haleon in 2022, has handed a rare boost to the London Stock Exchange.
Following a meeting with executives last week, Chancellor Rachel Reeves described the float as a “vote of confidence” in the UK. However, the lacklustre start to trading is likely to cast doubts over these claims.
The London market has suffered a torrid period in recent years, with scores of companies ditching the capital for New York. Tool rental giant Ashtead last week announced plans to move its primary listing from FTSE 100 to the US.
Xavier Rolet, the former head of the London Stock Exchange, this weekend said the market had become “deeply uncompetitive” and warned there was a “real threat” of more companies moving their listings.
Canal+, which operates in more than 50 markets around the world, has said it chose London because of its access to international investors. Maxime Saada, its chief executive, has also pointed to an unfavourable regulatory and tax regime in France.
The company, which last month celebrated its 40th anniversary, began as a pay-TV operator in France but has transformed itself into a streaming platform that bundles in rival services such as Netflix and Disney.
The company has 27m subscribers, two thirds of which are outside France. It is planning to further expand internationally, including through the $3bn (£2bn) acquisition of MultiChoice, Africa’s largest pay-TV operator.
The spin-off forms part of a wider break-up of Vivendi, which is controlled by Vincent Bolloré, the French media mogul. The group has said it is suffering from a “conglomerate discount” that has left it valued at less than €9bn.
Other parts of the group had a more successful start to trading. Advertising agency Havas rose by 8pc in Amsterdam, while publisher Louis Hachette Group, which remains in France, jumped by 17pc.
Canal+ is not the first spin-off to struggle in its early days. Dowlais Group dropped by 20pc on its first day of trading after being spun out of aerospace giant Melrose last year, while Haleon was down more than 22pc in its first month.