For our base case, we valued SFR at EUR 15B, which is at the lower end of the reported value of SFR being discussed in the Numericable bid or merger discussions. The reported range of values being discussed was EUR 15B to EUR 20B with most analysts agreeing SFR was worth 15B. The 15B figure would value SFR at 5.2 times 2013 estimated EBITDA, which is at the lower end of comparable transactions. For our aggressive case, we assumed that Vivendi did not overpay in the Vodafone transaction and SFR is worth EUR 17.6B. For the conservative case, we valued SFR at 4.5 times 2013 estimated EBITDA.
GVT Valuation Notes
For our conservative case, we valued GVT at the highest bid Vivendi has received to date, EUR 6B. For our base case, we used the lower value in the range of prices Vivendi is looking for (EUR 7B to 8B). For our aggressive case, we assumed that Vivendi got the higher end of that valuation range, EUR 8B.
Canal+ Valuation Notes
For our base case, we valued Canal+ at 8.25 times 2012 EBITDA, which is the blended average current multiple for cable TV and entertainment companies. For our conservative case, we valued Canal+ at 7 times 2012 EBITDA, which is the current average multiple for cable TV companies. For our aggressive case, we used 9.5 times EBITDA, which is the average of recent transactions and valuations involving mostly European media, broadcasting, and pay TV companies (shown in the table below).
*Shine Group was owned by Rupert Murdock’s daughter, analysts characterized the deal price as high but not over the top.
Activision Blizzard Valuation Notes
For our aggressive case, we took 61 percent of the current market value of Activision and then added an additional 20 percent. The additional 20 percent could represent a control premium since Vivendi controls a majority of Activision Blizzard, Inc. (NASDAQ:ATVI) and ATVI’s current market value is based on an outside passive minority shareholder, or the 20 percent premium could represent undervaluation (after all, ATVI does appear on Joel Greenblatt’s “magic formula” screening tool).
