Vivendi set to sell up to 50% of Universal Music Group within 18 months – but rules out IPO

Universal Music Group looks likely to have a new part-owner within the next 18 months – but it will not be ‘spun out’ onto the stock market via an independent IPO.

That’s the decision of the Management Board of UMG parent Vivendi, which today (July 30) presented its recommendations on the matter to its Supervisory Board.

An IPO was ruled out by Vivendi ‘due to its complexity’, said the company in a note to media.

However, Vivendi is recommending a ‘sale of up to 50% of UMG’s share capital to one or more strategic partners, in order to extract the highest value’.

What’s more, the French company wants to strike while the iron’s hot: it says a transaction ‘will likely be launched this fall and could be completed within the next 18 months’.

Vivendi will soon be engaging banks to help identify strategic partners for UMG’s part-sale, it said.

Vivendi will establish a floor price for the entry of partners into UMG’s share capital.

Previous valuations of Universal Music Group have placed the firm’s worth up to $40bn.

In May, Vivendo CEO Arnaud De Puyfontaine told shareholders: “The valuation of Spotify is interesting… and we believe the valuation of UMG is above that.”

Total revenues at UMG in 2017 – including recorded music, publishing and other activities – rose 10% at constant currency/perimeter last year to €5.67bn ($6.4bn).

According to the firm’s latest results, issued today, UMG turned over €2.628bn, up 6.8% at constant currency/perimeter.Music Business Worldwide

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