Vivendi To Sell Up To 50% Of UMG
• Vivendi SA today announced it will sell up to half of Universal Music Group, cashing in on a surge in music streaming that has infused new life into the industry after years of decline. Bloomberg reports the French media conglomerate will sell the stake to one or more “strategic partners” to secure the highest value and has ruled out an IPO because it is too complex, Vivendi said in a statement on Monday.
The announcement of the sale was tucked well into a lengthy, financially dense press release that touted, among other things, “Strong performance of Vivendi’s three main businesses in the first half of 2018.” On page 4, under the heading “Future Evolution of Universal Music Group’s Share Capital,” the release stated, “The Management Board presented to the Supervisory Board its recommendations following its analysis concerning the evolution of Universal Music Group (UMG)’s capital:
> Sale of up to 50% of UMG’s share capital to one or more strategic partners, in order to extract the highest value.
> An IPO was ruled out due to its complexity.”
The statement continues, “The transaction will likely be launched this fall and could be completed within the next 18 months. Vivendi will soon be engaging banks to help identify strategic partners. Vivendi will establish a floor price for the entry of partners into UMG’s share capital.” Analysts at Liberum this month valued UMG at $24 billion.
Vivendi said Universal Music’s streaming business performed strongly in the first half of 2018. Universal Music is the company’s biggest profit generator, representing around 45 percent of revenue and 70 percent of operating income last year.
