Gaumont, France's historic film company, is confronting a mandatory buyout offer for its minority shareholders, a decision enforced by the French financial regulator, Autorité des marchés financiers (AMF). This mandate follows a protracted dispute stemming from a 2017 strategic move where the Seydoux family, controlling nearly 90% of the company, effectively locked in smaller investors by reducing share liquidity. The Paris Court of Appeal recently upheld the AMF's October 2025 ruling, compelling Gaumont's majority owners to initiate a public buyout offer within a six-month timeframe, which is due to expire in mid-April. This situation highlights the regulatory power to protect minority investor interests in publicly traded companies.
The current predicament for Gaumont traces back to 2017 when the company divested its 34% interest in a cinema joint venture with Pathé for €380 million. Concurrently, Gaumont repurchased a substantial portion of its publicly traded stock. These actions were intended to streamline operations and consolidate control, inadvertently leading to the Seydoux family significantly increasing their ownership stake to 90%. However, a critical consequence of these maneuvers was a severe reduction in the trading volume of Gaumont shares on Euronext Paris. Over time, liquidity dried up, leaving minority shareholders, including investment funds like HMG, Gay-Lussac, and Axxion, unable to divest their holdings under normal market conditions.
The core of the conflict emerged when Axxion, a fund manager, petitioned the AMF in 2025, arguing that the reduced trading volume rendered their investments illiquid and trapped. The AMF's investigation confirmed this, noting that Gaumont's annual trading volumes plummeted to just over 17,000 shares in 2024. The regulator determined that it could take an unreasonable period, estimated between six and 17 years, for some investors to sell their shares at fair prices. Under French law, even a single valid request from a minority shareholder can trigger a compulsory buyout for all such investors, hence the Seydoux family's reluctant compliance with the AMF's order.
Initially, Gaumont and its dominant shareholders contested the AMF's directive, suspecting that certain investors aimed to force a buyout at an inflated valuation. However, their appeal was unsuccessful, placing the Seydoux family in a delicate position. Industry observers suggest that any attempt to undervalue the company during the buyout process could strategically weaken Gaumont, especially given its recent financial performance. Despite stable revenues of €150 million in 2025, the company experienced a significant increase in losses, soaring by 153% to €19.5 million. While theatrical revenues in France saw an 89% increase, largely due to successful films like Franck Dubosc’s “A Bear in the Jura” and Ken Scott’s “My Mother, God and Sylvie Vartan,” Gaumont has faced broader structural challenges. These include the impact of its 2017 decision to shift focus from exhibition to production and distribution, particularly after scaling back its operations in the U.S. market due to changes in streamer commissions.
This situation unfolds against a backdrop of broader changes within the French film industry, where other major studios are also navigating evolving financial landscapes. Pathé, for instance, chose to abandon its IPO plans despite several years of preparation, instead bringing in a minority shareholder, shipping billionaire Rodolphe Saadé, who acquired a 20% stake. Similarly, UGC, a significant cinema chain operator, welcomed Canal+ group as a minority shareholder with a 34% stake, with provisions for Canal+ to potentially assume full control by 2028. These developments underscore the dynamic and often complex financial environment within the European film sector, characterized by shifting ownership structures and strategic realignments.
In conclusion, the French regulatory body has mandated that Gaumont's controlling Seydoux family initiate a buyout offer for its minority shareholders. This decision, upheld by the Paris Court of Appeal, addresses concerns over illiquid shares following the family's increased ownership stake in 2017. The upcoming buyout process will require careful valuation and financing, set against Gaumont's recent financial performance and the broader shifts within the French film industry.
