Vivendi: Deutsche Bank downgrades rating post-spin-off

(CercleFinance.com) - Deutsche Bank announced on Tuesday that it had downgraded Vivendi shares to 'hold', from 'buy', while sticking to its target price of E2.
90.

The analyst refers to a 'key moment' in the media and entertainment group's history, with yesterday's initial public offerings of Canal+, Havas and Louis Hachette Group.

Vivendi's share price now reflects the company's new structure: a holding company with post-divestment assets, i.e. a set of interests in listed companies and still-consolidated video games activities, DB explains.

It points out that the demerger, which was intended to eliminate the conglomerate discount that the stock was carrying, created a valuation of around E600m, or 7% of the group's market capitalisation.

This is less than we anticipated, with the market assigning a larger discount than we expected, no doubt due to concerns about corporate governance, DB continues.

Now that the deconsolidation scenario - which was the mainstay of its buy recommendation - has passed, the professional has accordingly downgraded the stock.


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