After what has been a poor year for UK listings, the London Stock Exchange could afford to celebrate this week with the float of French media group Canal+ (CAN) which debuted with a market value of around £2.5 billion.

Although the shares were listed in London, and at that value would normally be eligible for inclusion in the FTSE 250 mid-cap index, they are excluded as the company is still French-domiciled.

Spun out of the Paris-based conglomerate Vivendi (VIV:EPA) and best known for the hugely successful Paddington films, Canal+ is one of only a few companies to list on the London market this year.

Others of note include computing firm Raspberry Pi (RPI) and sports health brand Applied Nutrition (APN).

‘Choosing London for Canal+ is important as it is the biggest company to join the UK stock market since changes to the listing rules in the summer and under the newly installed Labour government,’ said AJ Bell investment director Russ Mould.

‘If it does well, it could act as a shop window for other big names to float in London and help replenish the pot that has been shrunk by takeovers and de-listings.’

Canal+ was launched as a subscription TV channel in France in the 1980s and has since grown into a vast media group across more than 50 countries with more than 25 million subscribers and 400 million viewers including its streaming services.

Vivendi acquired the company in 2000, and the decision to IPO in London is part of a broader break-up of the group with the simultaneous listing of the advertising agency Havas in Amsterdam and the publisher Louis Hachette in Paris.

Canal+ shared closed down 18% on their first day of trading at 225p and by lunchtime on their second day of trading had settled 5% lower at 215p giving the company a market value of £2.15 billion.

‘It is 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,’ added Mould.

‘It can take a few weeks or months before the shareholder register shifts to individuals who want to hang around longer term.’

A portion of the shares are held by French financial institutions who are not able to invest in UK-listed companies.

In November this year, analysts at US investment bank JPMorgan valued Canal+ at around £5 billion or more than double its current market valuation. 

DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Ian Conway) own shares in AJ Bell. 

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