Britain's chancellor hailed this IPO to turn around the ailing 223-year-old stock market - and it's flopped in debut

MW Britain's chancellor hailed this IPO to turn around the ailing 223-year-old stock market - and it's flopped in debut

By Louis Goss

Groupe Canal+ shares fell sharply on their first day of trading on the London Stock Exchange on Monday in another major blow the U.K. government's push to restore investors confidence in Britain's 223-year-old stock market.

On Friday, Britain's Chancellor of the Exchequer Rachel Reeves welcomed Vivendi's decision to float its fully-owned film and television subsidiary Canal+ on the London Stock Exchange as a "vote of confidence in the U.K.'s capital markets."

The French company, which produced the "Paddington" films, saw its stock drop 14% Monday in its debut, marking another significant blow to the London Stock Exchange following a series of high-profile exits this year.

Vivendi's shareholders last week overwhelmingly approved the media conglomerate's plans to spin out Canal+ alongside advertising company Havas and publishing firm Louis Hachette by floating the three media companies in London, Amsterdam and Paris.

Canal+ shares fell sharply, even as shares in Havas increased by 7% in their trading debut in Amsterdam and Louis Hachette shares surged by 25% in Paris. Vivendi's (FR:VIV) Paris-listed shares increased 25% on Monday morning too.

Canal+'s share price slump, in turn, comes as another significant hit to the increasingly troubled London Stock Exchange, which is currently suffering in the face of a series of high-profile exits and a lack of initial public offerings.

Various issues including low valuations and a lack of liquidity on the U.K.'s main market have seen top companies - including Paddy Power owner Flutter Entertainment PLC (FLUT) and German travel agent Tui AG (XE:TUI1) - leave the London Stock Exchange for New York and Frankfurt respectively.

A flurry of acquisitions by U.S. companies and private-equity firms has worsened the problems faced by Britain's main market, as top companies are also increasingly opting to avoid floating on the London Stock Exchange altogether.

The U.K. government has, meanwhile, led a major push to improve the London Stock Exchange's prospects, including by pushing for an overhaul of the rules the Financial Conduct Authority uses to regulate publicly listed companies.

-Louis Goss

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December 16, 2024 07:04 ET (12:04 GMT)

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