Looks like Universal Music Group‘s stock is going public this year – in Amsterdam.
UMG parent Vivendi has confirmed it is examining a proposal to spin 60% of the music company out from the French company’s corporate ownership, and for UMG to start trading on the Euronext Amsterdam stock exchange by the end of 2021.
Arnaud de Puyfontaine and Yannick Bolloré (Vivendi’s CEO and the Chairman of its Supervisory Board, respectively), informed their colleagues of the news this morning (February 13).
A new Vivendi investor release reveals further details, noting that following the recent sale of UMG equity to a Tencent-led consortium for a €30 billion enterprise value, Vivendi has seen “interests expressed by other investors at potentially higher prices” for stakes in Universal.
Vivendi confirms that its management board is now considering “a distribution of 60% of UMG’s share capital to Vivendi shareholders” via a “special dividend”.
Vivendi adds: “The listing of the shares of UMG, a holding company currently being incorporated in the Netherlands, would be applied for on the regulated market of Euronext NV in Amsterdam, in a country which has been one of UMG’s historical homes. The transaction has received an initial favorable response from the Tencent-led consortium with whom the planned listing will be examined.”
A consortium led by Tencent Holdings last month closed the acquisition of a second 10% chunk of UMG equity, taking its total holding to 20%.
That acquisition gave Universal Music Group an enterprise valuation of €30 billion (currently worth around $36 billion).
A note from Exane BNPP today estimates that the 60% share disposal to Vivendi shareholders would see a pre-trading Universal Music Group approximately owned 20% by the Tencent consortium, 20% by Vivendi, 16% directly by the Bolloré group (which owns around 27% of Vivendi) and 44% by other Vivendi shareholders.
Sir Lucian Grainge, Chairman & CEO of Universal Music Group, informed his global employees of developments today via an internal memo, obtained by MBW.
“I couldn’t be prouder: not only is this a validation of our strategy, our teams, and our unprecedented record of success, it’s a natural evolution in the storied history of our company that will enable our entrepreneurial and creative culture to continue to soar.”
Sir Lucian Grainge, Universal Music Group
Writes Grainge: “I couldn’t be prouder: not only is this a validation of our strategy, our teams, and our unprecedented record of success, it’s a natural evolution in the storied history of our company that will enable our entrepreneurial and creative culture to continue to soar.
“We’ll continue to drive towards our strategic goals – full steam ahead. We’ll remain committed to our artists and songwriters. And we’ll continue to innovate and help lead the music community towards an incredible next chapter.
“In short, as I’ve said many times, we’ll stay true to our mission: harnessing our collective talents and resources to shape culture through the power of music. When, in collaboration with artists, we come together as a company, what we can achieve is truly remarkable.”
The note from Bolloré and de Puyfontaine, which you can read in full below, confirms: “The potential distribution of 60% of UMG’s share capital will be subject to a Vivendi Extraordinary Shareholders’ Meeting on March 29, 2021. The plan, if it comes to fruition, would mark a new phase in the outstanding relationship between our companies which has been established over many years.”
It adds: “UMG would be in a position to take advantage of greatly increased financial flexibility to pursue its dynamic growth and its pioneering role in the music and entertainment industry, to the benefit of artists and fans everywhere.”
Dear friends and colleagues,
We have some great news to share with you.
Today we announced Vivendi’s intention to examine the distribution of 60% of the Universal Music Group share capital and its subsequent listing before end 2021.
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.
UMG has strengthened its worldwide leadership by focusing on its creative DNA and uniqueness: talent, both new and established, both local and global. At the same time, UMG has succeeded in leading the massive transformation in consumer adoption of streaming and subscription.
Recently the successful opening of UMG’s share capital to an international consortium led by Tencent has confirmed its attractiveness with strategic investors.
The potential distribution of 60% of UMG’s share capital will be subject to a Vivendi Extraordinary Shareholders’ Meeting on March 29, 2021. The plan, if it comes to fruition, would mark a new phase in the outstanding relationship between our companies which has been established over many years.
UMG would be in a position to take advantage of greatly increased financial flexibility to pursue its dynamic growth and its pioneering role in the music and entertainment industry, to the benefit of artists and fans everywhere.
This new chapter in Vivendi’s journey would give the Group a unique opportunity to accelerate its development as a global leader in content, media and communications, promoting open-minded and multi-cultural creativity.
We will be able to count on additional financial resources with a strategic roadmap based on several pillars: the creation of high-quality content and global distribution capabilities; the development into new entertainment formats and high-potential markets; an increasing level of integration between our businesses and activities.
We are very excited by the prospects on the road ahead. We will continue, thanks to all of you, to promote what makes our group unique. Our business model is very robust. The diversity of our businesses and the creativity of our talents are second to none.
Thank you for what you have accomplished so far. We know we can count on you for the next chapters.
Yannick Bolloré and Arnaud de PuyfontaineMusic Business Worldwide