Universal Music valued at $39 billion ahead of stock market debut

Universal Music Group, the world's biggest statement whose lineup features The Beatles and Taylor Swift, was valued astatine much than $39 cardinal connected Monday, a time earlier its immense banal marketplace debut.

The institution is based successful the US but owned by French media conglomerate Vivendi, which is offloading a bulk involvement of the lucrative portion connected Amsterdam's Euronext scale connected Tuesday.

Euronext announced successful a connection precocious Monday that UMG's floating terms is 18.50 euros ($21.70) per share, putting its worth astatine 33.5 cardinal euros ($39.3 billion).

Vivendi is owned by French billionaire Vincent Bollore, who has positioned himself arsenic a almighty right-wing media baron successful caller years.

Although Vivendi volition clasp a chunk of Universal Music, it is looking to absorption much connected TV, advertizing and publishing.

Universal Music, similar its rivals Warner and Sony, was erstwhile threatened by music piracy but profits person soared successful the property of streaming.

It is location to galore of the world's biggest music stars, from Lady Gaga to Kanye West to Metallica.

Last twelvemonth the radical bought Bob Dylan's full opus catalogue for $300 million, 1 of the biggest acquisitions successful euphony history.

Crown jewel

Based successful Santa Monica, California, UMG has been the crown jewel of Vivendi's media empire, with a turnover of 7.4 cardinal euros past year, accounting for 46 percent of the parent company's revenue.

But arsenic it pivots towards different areas, Vivendi has already sold disconnected a 20 percent involvement of Universal to Chinese tech steadfast Tencent and 10 percent to US financier Bill Ackman.

"We are creating the conditions truthful that the valuation of Vivendi arsenic a full is greater than the sum of the parts that constitute it," said Vivendi main enforcement Arnaud de Puyfontaine.

Aware that shedding its fig 1 plus mightiness beryllium a risky move, Vivendi has taken steps—described arsenic "quite extraordinary" by 1 activistic shareholder—to support its ain stock price.

It has secured statement from its investors for a monolithic buyback of up to fractional its shares pursuing the UMG flotation.

That volition springiness the steadfast bulging coffers with which to support itself from a hostile takeover bid should its stock terms autumn arsenic expected pursuing the sale.

Still, Vivendi "will person to amusement that determination are existent synergies" to warrant its valuation aft the merchantability of UMG, said expert Thomas Coudry of Bryan Garnier & Co.

Four cardinal songs

Vivendi volition administer 60 percent of UMG shares to its investors successful the floatation portion hanging connected to 10 percent and maintaining a joint-management statement with Tencent.

Bollore volition stay a almighty fig astatine UMG, taking 18 percent of the floated stock, worthy astir six cardinal euros, and a spot connected its caller board.

UMG, meanwhile, is not conscionable counting connected its euphony to thrive aft it goes public.

A prospectus for the IPO says UMG's 3 main operating businesses are recorded music, euphony publishing and advertising, but that it is besides expanding into areas specified arsenic unrecorded events, livestreaming, film, tv and podcasts.

More than fractional of UMG's grounds euphony gross came from its immense backmost catalogue of euphony (defined arsenic much than 3 years old), portion 46 percent came from caller releases.

UMG's planetary publishing catalogue contains 4 cardinal titles.

With a wide scope of frontline labels and diversification of gross streams, the prospectus says, "UMG is not reliant connected 1 artist, oregon connected a tiny fig of artists, to make gross successful immoderate fixed year."

UMG's apical 50 artists accounted for conscionable 23 percent of its recorded euphony gross past year, and nary azygous creator represented much than 1 percent.

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© 2021 AFP