Vivendi splits listing
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February 25, 2000: 9:35 a.m. ET
Utilities unit to trade separately to boost share price, clarify business
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LONDON (CNNfn) - French water-to-telecommunication conglomerate Vivendi plans later this year to split its utility operations - including the world's biggest water company - from the remainder of its businesses, and will list shares in both the new unit and the parent on the New York stock exchange as early as this summer, to clarify the company's holdings for shareholders, according to a published report Friday.
Vivendi's non-utility businesses comprise telecommunications, publishing and pay-television. It owns 49 percent of Canal Plus, Europe's biggest pay-TV company.
In an interview with the Wall Street Journal, Vivendi's chief executive Jean-Marie Messier said the company is making the move so the utility business can finance its own growth through the capital markets and also in an attempt to destroy its image as a "nebulous conglomerate", which it feels has penalized Vivendi's share price. Vivendi shares rose just 28 percent last year, underperforming the Paris Bourse.
Messier told the paper Vivendi would initially offer 30 to 40 percent of the utility, to be called Vivendi Environment, "around summertime", and seek a U.S. listing for the parent company later in the year.
The remarks echo comments Messier made to Radio Europe One Wednesday, when he announced he expected the branch of his firm that handles waste and water treatment to be quoted on both the Paris and New York stock exchanges this year.
"This is the final stage of Vivendi's restructuring," Messier told the Journal. "This will clarify things for the shareholder whose investment priority is communications."
Cie. Générale des Eaux, as Vivendi was known before its name change, was engaged in 25 different businesses as recently as four years ago. The newspaper said investors have been reluctant to buy Vivendi because of the diversity of its businesses. Its stock has risen 34.6 percent since the start of 2000 while shares in Canal Plus have soared 71.6 percent.
Vivendi recently sold some utility businesses, prompting speculation it would spin off all of its utilities to focus on its expanding communications activities, according to the Journal. But Messier insisted Vivendi will keep the utilities division.
"When you have an activity with 10 percent annual growth, you don't sell it," he told the paper.
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