The sale of up to 50% of Universal Music Group, the world’s biggest music rights-holder, is gathering pace.
Barely a week after MBW revealed that JPMorgan had slapped a huge $50bn valuation on UMG, its potential buyers are starting to become more apparent.
According to Reuters sources, Chinese media giant Tencent and global investments group KKR are both mulling acquisition bids for Universal.
Each of these bids are potentially worth up to €20bn ($22.73bn) for up to half of UMG – suggesting that the duo’s interest would value Universal at somewhere around $46bn.
Reuters further reports that UMG parent Vivendi is in the process of selecting banks to assist in the partial sale of the music company. These banking partners are expected to be appointed in March, with a sale process kicking off in Q2.
However, it appears early-stage, informal discussions about a sale are already underway with potentially interested parties.
JPMorgan media analyst Daniel Kerven recently described UMG as “a unique asset” which owns and controls “undermonetized, must-have, global content that is strategic to the tech giants and can’t be replicated”.
JPMorgan’s $50bn valuation was worth no less than 48.8 times Universal’s latest annual EBITA (earnings before interest, taxes, and amortization).
UMG recorded a €902m ($1.07bn) EBITA in 2018, with total yearly revenues – across records, publishing, merch and more – weighing in at €6.023bn ($7.15bn).
Universal’s biggest recording artists last year were led by Drake (pictured), followed by Post Malone, The Beatles and XXXTentacion.
KKR was previously a joint venture partner in another music company, BMG, but the firm was bought out by Bertelsmann in 2013.Music Business Worldwide