(BFM Bourse) – On Thursday, Sodexo listed its meal voucher business on the stock market. Like the collective catering specialist, Sanofi and Vivendi also intend to separate their activities via an IPO. Which is no longer relevant for Renault, which has given up on putting Ampere, its subsidiary dedicated to electric vehicles and software, on the financial markets.
Since this Thursday, the Paris Stock Exchange has had a new resident in its ranks. This is Pluxee, the Sodexo entity which brings together so-called “employee benefits and rewards” services, that is to say quite simply meal vouchers and gifts.
And the least we can say is that Pluxee’s first stock market steps were crowned with success, with a stock that jumped 15% on Thursday February 1st. Sodexo, on the other hand, ended this session down 5.5%, the victim of a transfer of value to its ex-subsidiary.
Without prejudging Pluxee’s future stock market performance, the reception given to this operation proves Sodexo’s management right for the moment. The latter decided, last spring, to give independence to its meal voucher subsidiary, noting limited synergies with its traditional collective catering activities. The idea is to replicate the success of its competitor Edenred, the former Accor subsidiary that entered the CAC 40 last June, which has gained 270% since its IPO in 2010.
This operation responds to clear and usual logic on the stock market. To better promote a branch of activity or a subsidiary, a parent company can indeed decide to separate from it and list it on the stock market. The market often tends to prefer separately listed activities to companies with several activities. And this is the choice that was therefore favored by Sodexo to better promote its growing activity.
This operation was especially eagerly awaited by the markets, which wish to turn the page on a complicated 2023 vintage on the front of IPOs. In Paris, no large-scale transactions targeting individual investors have been recorded on the regulated market of Euronext Paris since Lhyfe in May 2022.
Renault goes into reverse
The future of the IPO market in Paris therefore rests on the shoulders of the young Pluxee which has only a few days of official existence. Especially since Renault indicated Monday evening that it was abandoning its plan to list Ampere, its subsidiary dedicated to electrical technologies and embedded software.
This project launched in 2022 was supposed to crystallize the value of Renault’s jewel, its electric flagship. But the car manufacturer preferred to backtrack, judging that “current market conditions” were not met to guarantee the success of the operation. In other words, investors were not prepared to value Ampere as high as the group wanted.
Last November, the Diamond brand had already warned the market of such an about-face, if it failed to achieve the hoped-for valuation of 8 to 10 billion euros for Ampere.
“We’re going to see if we find a good window to do an IPO (initial public offering, editor’s note), Luca de Meo then confided on BFM Business. We don’t have the technical need to do an IPO because we have the cash to finance the project.
For analysts, Renault has therefore demonstrated pragmatism. “This renunciation is logical, the market valuations are bad. As much as investors like Ampere strictly speaking, they did not like the IPO (the initial public offering),” remarked an analyst based in London.
And on the market side, Renault’s pragmatism was favorably received. Renault shares then jumped nearly 5% in early trading before limiting their advance to 0.4% at the close on Tuesday, January 30.
Vivendi, rather a separation into 4 than into 3
The abandonment of Renault has not yet dissuaded the suitors from pursuing their split project. The French media and publishing giant Vivendi still intends to split into several entities in accordance with what it announced in mid-December.
On Tuesday, Vivendi’s supervisory board validated this split project with the difference that it would involve a separation into four entities, and no longer into three companies in accordance with what was announced in mid-December. In the new version, this split would therefore concern Canal+, Havas, a company bringing together publishing and distribution (Lagardère and Prisma Media) as well as an investment company.
It should be remembered that Vivendi suffers from a defect that is hardly appreciated by the market: it is a conglomerate, bringing together several relatively distinct activities such as media and cinema (Canal+, Prisma Media), video games (Gameloft), communication (Havas) and more recently Hachette and travel retail (sales in airports and train stations) via the takeover of Lagardère, finalized in mid-November.
The aim of the maneuver is clearly stated: to reduce Vivendi’s stock market discount by obtaining more generous valuation multiples for each of the four companies that will be listed. Vivendi also says this very clearly in its press release: “since the listing of Universal Music Group in 2021, Vivendi has suffered a very high conglomerate discount, significantly reducing its valuation and thus limiting its capacity to carry out capital transactions. external growth (company buyouts, Editor’s note) for its subsidiaries.
The pharmaceutical sector at the forefront
Sanofi, another CAC 40 company, announced at the end of October its decision to separate from its “consumer health” activity, which includes products for allergies, colds, coughs, diarrhea and constipation, including famous Doliprane. This will involve the IPO of this entity, an operation which will ultimately take place no earlier than the fourth quarter of 2024.
“This would be the operation of the year since we are talking about a valuation of 15 to 25 billion euros,” estimates a banker quoted by Agefi-Dow Jones.
The French pharmaceutical giant has already tried this exercise with the listing on the stock market in May 2022 of Euroapi, its branch dedicated to active pharmaceutical ingredients. After a thunderous debut on the stock market, Euroapi suffered a series of disappointments until it lost 59% of its value on October 10, 2023 after having warned about its 2023 results. To date, Euroapi is trading at a price which is two times lower than that which was its price at the time of its IPO, namely 12 euros.
Despite this failure, Sanofi is not afraid of the idea of embarking on such a project for its “consumer health” activity. The French group is not the only company in the pharmaceutical sector to want to sell off an activity. Like Sanofi with Euroapi, the Israeli laboratory Teva indicated this Wednesday that it wanted to split its active ingredient production division during the first half of 2025. For the generic medicines giant, this split “should create additional value for shareholders of Teva” and should allow this division “to better address distinct and growing markets”.
A little earlier in the week, it was the Swiss cement and concrete giant Holcim which announced that it was aiming for a separate listing on Wall Street of its North American activities for the first half of 2025. Here too, the Swiss group wishes give its “rock star” the means to develop. To proceed with this IPO, Holcim will however have to obtain the green light from its shareholders during an extraordinary general meeting, the date of which has not yet been communicated.
In addition to these splits, many candidates for an IPO will have to liven up the market this year. And above all to forget a very bad 2023 vintage. Last year, the number of IPOs in the world fell below the 1,300 operations mark, to 1,298, for a total amount raised of 123.2 billion dollars. This activity is down 8% in volume and 33% in value compared to the $179.5 billion raised in 2022, reported EY in its latest study devoted to the global IPO market. “Faced with a stabilizing monetary policy, stock market candidates could prepare for more favorable windows in 2024,” explained Franck Sebag, partner at EY.
Sabrina Sadgui – ©2024 BFM Bourse
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