Vivendi
Vivendi Sets Date for Universal Music Group Spinoff
Shares of Universal Music Group will begin trading on the Amsterdam Euronext market “before or by” Sept. 27, parent company Vivendi revealed on Wednesday (May 12). Vivendi’s proposal for the UMG share distribution will be put to a vote at the company’s shareholders’ meeting on June 22. Vivendi’s largest institutional shareholders “have been calling for the split or distribution” of UMG to better reflect the fast-appreciating value of its music division, according to Wednesday’s report. Vivendi’s own valuation suggests UMG is being grossly undervalued: on Wednesday, Vivendi’s market value on Wednesday was 32.4 billion euros ($39.11 billion), slightly below Vivendi’s estimate of 33 billion euros ($39.84 billion) for UMG — even though UMG accounted for 45.8% of Vivendi’s first-quarter revenue...
It’s a Growth Story: What’s Behind UMG’s Accelerated IPO Plans?
Vivendi could earn about 9 billion euros ($10.9 billion) from the IPO, if it maintains majority ownership by unloading just just under 30% of UMG at the same 30 billion euros ($36.3 billion) valuation used last year when it sold a 20% stake to a consortium led by Chinese tech giant Tencent Corp. At that head-turning 36-times EBTIDA valuation, a multiple often seen in fast-growing tech companies, Tencent “made people take a step back and look at the valuations of music companies,” says Michael Poster, the head of Michelman & Robinson’s corporate and securities department. That’s not an unreasonable valuation: a rapidly-growing streaming market, believed by Goldman Sachs to reach 1.15 billion subscribers...
Vivendi Planning to Move Forward With UMG IPO This Year
The idea is to avoid the so-called “conglomerate discount,” under which a company could be valued by the market as less than the sum of its parts — especially by investors looking for more direct exposure to the music sector at a time when streaming is fueling growth and optimism. “This plan is the result of the joint efforts in recent years by the Vivendi and the Universal Music Group, under the leadership of Sir Lucian Grainge, to further the company’s position as the music industry’s undisputed leader,” Vivendi said in a letter about the move that was shared internally at Universal by Grainge, the company’s chairman and CEO. “Recently the successful opening of UMG’s share capital to an international consortium led by Tencent has confirmed its attractiveness with strategic investor...
