Universal Music Group has completed its first-ever share buyback program.
The company has now spent EUR €499.2 million (approx USD $568M) buying back 26,707,529 of its own shares since the program began in April.
UMG announced the news in a press release on Monday (July 27).
Universal said it had repurchased a further 634,455 shares in the program’s final week, from July 20 to July 24, at an average price of €18.14 each.
Those trades cost €11,510,143 (approx $13.1 million).
MBW reported last week that the program was around 97.5% complete, with roughly €12.3 million of the cap then still to spend.
The program had been due to conclude no later than October 1.
UMG announced the share buyback program on March 30.
At the time, UMG Chief Financial Officer Matt Ellis explained the company’s decision to begin buying back its stock.
Said Ellis: “Since our transition to a public company, we have consistently delivered sustained growth, strong financial results and strategic leadership, establishing a robust foundation for long-term value creation.”
He added: “We currently see a meaningful dislocation in UMG‘s market valuation. Our strong balance sheet and cash generation gives us the flexibility to repurchase shares, while preserving ample capacity to invest in our growth strategy, and reconfirming our commitment to maintaining our credit ratings and our dividend policy.”
UMG intends to use the repurchased stock to meet obligations under its 2022 Global Equity Plan and/or to reduce its share capital.
In April, UMG said it would sell half of its stake in Spotify, a holding then worth around USD $1.4 billion, and direct its share of the proceeds toward the share buyback process.
The €500 million program only forms the first part of UMG‘s total share repurchase headroom.
Also in April, UMG expanded its buyback authorization to €1 billion: the original €500 million plus an additional €500 million, approved by shareholders at the company’s Annual General Meeting (May 13).
The company used half of that additional €500 million authorization in June, spending €250 million ($290 million) of it to buy 14,156,285 shares directly from Bill Ackman’s Pershing Square as the fund exited its stake.
That purchase came weeks after UMG‘s board rejected a takeover proposal from Ackman and Pershing Square.
UMG is due to report its second-quarter results on Thursday (July 30).
The company posted first-quarter revenues of €2.90 billion ($3.39 billion) for the three months to the end of March, flat year-over-year as reported and up 8.1% at constant currency.Music Business Worldwide