Compagnie du Cambodge, owned by French mogul Vincent Bolloré, is not very well known among investors in Africa. An interesting fact, given that Compagnie du Cambodge is one of the biggest companies on the continent. Now shares in the company are rallying – how come?
Capital News Africa: From the Trading Floor – Week 39-2022
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Compagnie du Cambodge (ISIN: FR0000079659) is a very discrete company. Judging solely by the name, one would think this is a firm that is active in southeast Asia. The company also tends to avoid any public attention, with the result that it is not really on investors’ radar screen.
But the fact is that Compagnie du Cambodge is very active in African logistics and has a listing on the Euronext Paris stock exchange. Although it boasts a market cap of €3.2 billion, trading in Compagnie du Cambodge is minimal, with less than ten shares a day exchanging hands. This is because the free-float for Compagnie du Cambodge is just 0.8%, or 4478 shares.
Due to the minimal trading activity, Compagnie du Cambodge’s share price doesn’t normally budge. As the year began, the share stood at EUR 7175 - more or less the same level since 2013. But as the winter of 2022 progressed, the share took a sudden plunge, losing 30% of its value to trade at a low of EUR 5100. But last week, Compagnie du Cambodge’s share suddenly rallied. After taking another plunge of 4% it bounced back, gaining more than 12%. The share has now settled at EUR 5500, and observers of the share are scratching their heads as to why the share has moved upward.
Could news about the company’s business be the reason? Well, Compagnie du Cambodge has not really published any news for some time. Its results for the financial year 2021 were disclosed last 28 April. Sales were at EUR 200,000, net income at EUR 12.8 million. There has been no recent change in the company’s business, which includes concessions in Vietnam, Sumatra, Malaysia and in Africa.
That may sound somewhat inconspicuous, but the fact is that Compagnie du Cambodge is one of the biggest companies in Africa, operating railways in Burkina Faso and the Ivory Coast for goods transport. The other 99.2% of the shares are held by Vincent Bolloré, one of France’s biggest businessmen. Bolloré’s other holdings include media conglomerate Vivendi and its subsidiaries Universal Music and Canal Plus; the financial investor Financière de l’Odet; as well as the Plantations des Terres Rouges, a plantation in Indonesia that grows cotton and corn. Finally, Vincent Bolloré is known in France as the owner of Paris Match, a popular magazine that deals with stars and other public figures.
Vincent Bolloré turned 70 last April. About two months before his birthday, he transferred his business empire to his sons. As reported, Cyrille Bolloré has taken over the logistics businesses, but is not really as interested in Africa as his father was. This brings us to the possible reason for the rally in Compagnie du Cambodge’s shares: It appears as though the investors owning the small free-float are speculating that the impressive Bolloré empire could be restructured by the mogul’s sons. Such a restructuring may entail the Bolloré sons taking Compagnie du Cambodge private and in doing so, making an attractive offer for the shares outstanding.
It will be very interesting for the public to see what the sons do the family empire and what role the African business - including Compagnie du Cambodge - plays. Due to the minimal free-float, Compagnie du Cambodge may appear rather uninteresting to most investors. But we think that it deserves the attention of investors, as it reflects how important Africa will be for the Bolloré family empire.