Canal+ float fails to make a splash as shares fall more than 23 per cent
The float of Canal+ on the London Stock Exchange got off to a shaky start with its share price dropping more than 23 per cent, valuing the company at around £2.4bn.
The only £1bn-plus IPO of the year is the product of a long-awaited breakup of Paris-based Vivendi, which acquired Canal+ in 2000.
Shares of the Paddington producer fell sharply in the three hours after the market opened, falling from an IPO price of 290p to a low of 213p before recovering slightly.
Susannah Streeter, head of money and markets for Hargreaves Lansdown, said it was a “disappointing” debut on Monday.
Investors had been hoping that a roaring success from Canal+ might be able to reinvigorate the London Stock Exchange after a dearth of successful IPOs on the market.
Tom Snowball, head of UK equity capital markets at BNP Paribas and an adviser to Canal+ on the IPO, previously told City PM that the float would be “positive for the general narrative and sentiment” after a lacklustre year for the capital’s flagship bourse.
However, a drop in the share price had been expected, as some holders of Vivendi are likely restricted to French-listed stocks and so are being forced to sell off Canal+ shares.
“It’s common for demerged stocks to experience share price wobbles in the first few days as a standalone listed company as investors who inherited the stock decide if they want to stay or go,” explained Russ Mould, investment director at AJ Bell.
“It can take a few weeks or months before the shareholder register shifts to individuals who want to hang around longer term.”
Canal+ is now valued at less than British rival ITV, despite having annual revenue about a third larger.
Rasperry Pi, the other much-hyped float for London this year, initially saw explosive growth in its share price before eventually levelling off after a week. It is up 13 per cent since the IPO.