(The Times)
An activist investor has urged Canal+ to set out clearer long-term performance targets and improve the communication of its strategy to the market, as its stock languishes below flotation price.
A lack of “transparent communication” from the French streaming and film production company behind the Paddington films, which was London’s biggest IPO last year, was partly responsible for the weakness in the company’s valuation, Selwood Asset Management suggested.
“They really stand out in terms of how little disclosure they’ve given,” Karim Moussalem, chief equities investment officer at the UK-based hedge fund, said. While Maxime Saada, the Canal+ chief executive, had been “impressive” at private meetings, management had been “quieter” with the market, he added.
“Any company should have profit targets,” Moussalem said. “Because of all the moving parts with this company, it makes sense to have a target for 2027, 2028, rather than necessarily 2025, which is a transition year.”
The group has said it expects revenue and adjusted profit margin to grow “moderately” in the medium term.
Canal+ is in the throes of buying MultiChoice, the African TV streaming service, and extended the deadline by six months to October 8 to give regulators more time to clear the deal.
It was “understandable” that the company may want to wait until the deal closes before outlining exact synergies that it could realise from the acquisition, Moussalem said.
Canal+ declined to comment.
The IPO in December was seen as a boost for London, which has suffered from a relative dearth of initial public offerings in the past couple of years, something that has troubled both the City and the Treasury and which has led to reforms aimed at reinvigorating the capital’s appeal.
However, shares in Canal+, which was spun off by Vivendi, the French media heavyweight controlled by the billionaire Bolloré family, are now trading at just over 150p, almost 50 per cent lower than the listing price of 290p, after falling by about a fifth on the first day of trading. The business is now valued at £1.5 billion.
Vivendi has argued that London was the best place for the Canal+ listing due to its strength with international investors. The wider break-up was to try to narrow the conglomerate discount at which the group has traded for years.
The market had underestimated the level of “flowback” from European investors that cannot own UK-listed companies selling down their holdings after the spin-out, Moussalem said. The company is not included in the FTSE indices since it has continued to be domiciled in France.
An improvement in the company’s performance would be helpful for the UK market, Moussalem added, since it was not currently “giving the best image of what a listing in the UK can do”.
Selwood has said it has an interest of 0.5 per cent in the company.