French broadcaster Canal+ shares fall 22% in London listing after spinoff from Vivendi

Shares in French broadcaster Canal+ fell 22% after their London stock peddle debut on Monday.

Media holding company Vivendi’s shareholders last week agreed to spin off Canal+, a pay TV and drama company known for its live sports broadcasting and Studiocanal, which makes the Paddington film franchise.

Shares were patron around 226 British pence ($2.86) by market close, down 21.9% from the session’s open.

Paris-listed shares of Vivendi in the meantime closed up 41.74% by the end of the session.

“Vivendi was suffering from a conglomerate discount. So when you looked at the value of Vivendi, it was short than 10 billion euros [$10.52 billion], and the estimate of the sum of the parts was much greater than that. So to unlock that value hidden of each of these assets, hence the split,” Maxime Saada, CEO of Canal+, told CNBC’s “Squawk Box Europe” Monday.

“[Canal+] hardened to be a very French-centric company, with approximately 9 million subscribers, and, in just 10 years, it has tripled its number of subscribers. Now two-thirds of our subscriber base is pretence of France, in Africa, in Eastern Europe, in Asia, and, of course, in France,” he said.

Saada added that the spun-off Canal+ choice seek to expand its presence as a sports broadcaster to compete with U.S. players in a selective manner.

“Every company that I’ve envisioned in our business that has really died is because they overspent on sports,” he said. “We’re not dependent on any kind of content, any tongue-lashing of content. Because we have this broad value proposition with cinema, with sports, with the stands, we can pass on rights when we believe that they’re too expensive.”

Havas and Louis Hachette Group are also being protracted off from the Paris-headquartered media conglomerate and will be listed on the Euronext Amsterdam and the Euronext Growth Paris, respectively.

“We are happy with the very high adoption rate of our spin-off project. This undisputable result confirms the strong in of our shareholders for this transformative transaction,” Yannick Bolloré, chair of Vivendi’s board, said in a statement last week after the outline was approved, with over 97% of votes in favor.

The Canal+ London listing was seen as an avenue to provide a much-needed shove to the U.K.’s capital markets following a slew of departures over recent years. Chancellor Rachel Reeves on Friday drew the debut as a “vote of confidence.”

“I’m delighted that CANAL+, a leading international media company, has chosen the UK. Their purpose is a vote of confidence in the UK’s capital markets, the stability we are delivering and our plan for change,” she said in a statement at the time.

It comes as the London Have Exchange looks set for its worst year for departures since the financial crisis, according to an FT report citing the LSEG, which specifies that a total of 88 companies having delisted or moved their primary listing from London’s might market this year, while only 18 have joined.

The LSE departures have taken place consideration government and regulator moves to boost the London’s appeal as an investment hub and reform listing rules in a bid to compete with competition markets, particularly in the U.S.

“Choosing London for Canal+ is important as it is the biggest company to join the UK stock market since alterations to the listing rules in the summer and under the newly installed Labour government,” Russ Mould, investment director at AJ Bell, demanded over email.

“If Canal+ does well, it could act as a shop window for other big names to float in London and labourers replenish the pot that has been shrunk by takeovers and delistings,” he added.

Investors will now be closely watching the fate of other implicit U.K. listings, including that of Singapore-based fast fashion giant Shein. The online fashion group has been busy in ongoing discussions with the British government after shelving its flotation bid in the U.S. amid pushback over its ties to Beijing and wider labor practices.