An Updated Sum Of The Parts Valuation of Vivendi
While I am waiting for Dole’s next quarterly report to come out so I can finish my updated valuations and analysis of it, I have been researching some new companies and reanalyzing Vivendi and Core Molding Technologies since new information has come out about both.
After revaluing CMT with updated quarterly numbers it is still selling at a very good discount to my estimate of intrinsic value and I may buy more shares at any time after hearing specifics from CMT management about how Navistar’s problems are affecting it.
When I did my first sum of the parts valuation of Vivendi in July I had no information or very limited information about the values of its subsidiaries: GVT, Canal+, SFR, and Universal Music Group. Since that time some information has come out about three of those, which has helped clarify the sum of the parts valuation quite a bit.
Vivendi is still seeking to spin off or sell some of the below companies to unlock value in its shares.
- An estimated sale price for SFR if Vivendi were to find a buyer is at 15 billion Euros
- Canal+ 20% estimated price that Vivendi does not own has a conservative estimated IPO price of $900 million. Vivendi owns 80% of Canal+ meaning conservatively its estimated stake in Canal+ has a price of $3.6 billion.
- Vivendi is seeking 5.5 billion Euros for its 53% stake in Maroc Telecom. Vivendi’s current 53% stake market price in Maroc Telecom is worth 4.72 billion Euros or $6.02 billion.
- Vivendi owns 60% of Activision Blizzard which is currently worth $7.44 billion at market.
- Vivendi is seeking at minimum 7 billion Euros for GVT.
- I still cannot find any reasonable estimate of value for Universal Music Group so at this point I will still leave this out of my estimates.
Adding all of the above together and converting everything to US Dollars gets us to a total estimated price of $46.13 billion. Vivendi’s numbers of shares are still 1.242 billion.
- $46.13/1.242=$37.14 per share.
For the sake of being conservative and assuming that Vivendi will not be able to get the prices it wants from some sales or spin offs of some of the subsidiaries, which is already the case in a couple instances, I will knock off $7.14 from the per share estimate which gets us to an extremely conservative, probably too conservative, value of Vivendi at $30 per share, which still does not even include UMG or Vivendi’s cash and debt.
Here is my original Vivendi article from June for a comparison of the values then and now.
The $30 per share price is an absolute worst case estimate of value. Today I bought more shares at $19.22 per share for all portfolios that I manage, meaning there is still a 36% margin of safety to my absolute lowest case value of Vivendi, and an almost 50% discount to my more reasonable estimate of value. Neither of the two estimates even take into account Universal Music Group, Vivendi’s cash, or debt.
Vivendi now makes up about 25% of my personal portfolio.