Universal Music Group has now spent comfortably more than USD $500 million buying back its own shares.
As a result, the company’s first-ever share repurchase program is nearly complete, with around 97.5% of its EUR €500 million (approx USD $570M) share buyback budget now spent.
In total, UMG has repurchased 26,073,074 of its own shares since the program began in April, at a cost of EUR €487.7 million (approx $558M).
UMG said on Monday (July 20) that it repurchased a further 50,062 shares in the week from July 13 to July 17, at an average price of €18.43 each.
Those trades cost €922,715 (about $1.06 million).
That leaves around €12.3 million of the company’s €500 million cap still to spend.
The program is due to conclude no later than October 1.
Universal announced the share buyback program on March 30.
At the time, UMG Chief Financial Officer Matt Ellis explained UMG’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 announced an expansion of its buyback authorization to €1 billion: the original €500 million plus an additional €500 million. This was approved by shareholders at UMG’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.
UMG is due to report its second-quarter results on July 30.
The company posted first-quarter revenues of €2.90 billion ($3.39 billion) for the three months to end of March.
That was flat year-over-year as reported, but up 8.1% at constant currency.Music Business Worldwide