It looks like Universal Music Group will go public this year – in Amsterdam.
UMG parent Vivendi has confirmed that it is considering a proposal to separate 60% of the music company from the French company’s property and to trade UMG on Euronext Amsterdam by the end of 2021.
Arnaud de Puyfontaine and Yannick Bolloré (Vivendi’s CEO and Chairman of the Supervisory Board, respectively) informed their colleagues about the news this morning (February 13th).
A new release from Vivendi investors reveals more details. Following the recent sale of UMG shares to a consortium led by Tencent for an enterprise value of 30 billion euros, Vivendi has identified “interests of other investors at potentially higher prices” for shares 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 registered in the Netherlands, would be requested on the regulated market of Euronext NV in Amsterdam in a country which is one of the historic houses of UMG. The transaction was initially positively received by the Tencent-led consortium with which the planned listing is being examined. “
A consortium led by Tencent Holdings completed the acquisition of a second 10% portion of UMG’s equity last month and increased its total stake to 20%.
This acquisition gave Universal Music Group a company valuation of 30 billion euros (currently around 36 billion US dollars).
In a press release from Exane BNPP today, it is estimated that if 60% of the shares were sold to Vivendi shareholders, a Universal Music Group would be about 20% owned by the Tencent consortium, 20% owned by Vivendi and after the IPO 16% would be directly owned by the company Bolloré Group (which owns around 27% of Vivendi) and 44% of other Vivendi shareholders.
Sir Lucian Grainge, Chairman and CEO of the Universal Music Group, informed his worldwide employees of today’s developments in an internal memo received from MBW.
“I couldn’t be prouder: This is not only an affirmation of our strategy, our teams and our unparalleled track record, but also a natural evolution in our company’s history that allows our entrepreneurial and creative culture to continue rising.”
Sir Lucian Grainge, Universal Music Group
Grainge writes: “I couldn’t be prouder: This is not only a confirmation of our strategy, our teams and our unparalleled success story, but also a natural development in the history of our company, which enables our entrepreneurial and creative culture to continue to grow.
“We will continue to work towards our strategic goals – with full speed ahead. We remain committed to our artists and songwriters. And we will continue to innovate and help take the music community to an incredible next chapter.
“In short, as I have said many times before, we stay true to our mission: we use our collective talents and resources to shape culture through the power of music. When we come together in collaboration with artists 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 an extraordinary general meeting of Vivendi on March 29, 2021. The plan, if any, would mark a new phase in the excellent relationship between our companies that has been built over many years. “
It adds: “UMG would be able to leverage the greatly increased financial flexibility to pursue its dynamic growth and pioneering role in the music and entertainment industry for the benefit of artists and fans everywhere.”
Dear friends and colleagues,
We have some great news for you.
Today we announced Vivendi’s intention to examine the distribution of 60% of Universal Music Group’s share capital and subsequent listing before the end of 2021.
This plan is the result of Vivendi and Universal Music Group’s joint efforts over the past few years, led by Sir Lucian Grainge, to strengthen the company’s position as the undisputed leader in the music industry.
UMG has strengthened its global leadership position by focusing on its creative DNA and uniqueness: new and established talent, both local and global. At the same time, UMG has succeeded in driving the massive transformation of consumer acceptance of streaming and subscription.
Recently the successful opening of UMG’s share capital for an international consortium led by Tencent confirmed its attractiveness with strategic investors.
The potential distribution of 60% of UMG’s share capital will be subjected to an extraordinary general meeting of Vivendi on March 29, 2021. If carried out, the plan would mark a new phase in the outstanding relationship between our companies for many years to come.
UMG would be able to use the greatly increased financial flexibility to pursue its dynamic growth and its pioneering role in the music and entertainment industry for the benefit of artists and fans everywhere.
This new chapter in Vivendi’s journey would provide the group with a unique opportunity to accelerate their development as a world leader in content, media and communications and to nurture open-minded and multicultural creativity.
With a strategic roadmap based on several pillars, we can count on additional financial resources: the creation of high quality content and global distribution capacities; the development of new entertainment formats and markets with high potential; an increasing integration between our companies and activities.
We are very excited about the prospects on the way. We will continue to work with all of you to promote what makes our group unique. Our business model is very robust. The diversity of our companies and the creativity of our talents are unsurpassed.
Thank you for what you have achieved so far. We know we can count on you in the next few chapters.
Yannick Bolloré and Arnaud de PuyfontaineMusic business worldwide