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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The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.
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.
Copyright (c) 2024 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
The information and analyses published by Cercle Finance are intended solely as a decision-making aid for investors. Cercle Finance cannot be held responsible, directly or indirectly, for the use of information and analyses by readers. Uninformed investors are advised to consult a professional advisor before investing. This information does not constitute an invitation to sell or a solicitation to buy.