Vivendi, owner of the world’s largest music company, Universal Music Group, told investors on Tuesday that it is considering selling an additional 10% stake in the company to an unnamed U.S. investor. Vivendi, which has already sold 20% of UMG to Chinese giant Tencent, is expected to sell off 60% of UMG in an IPO by the end of September.
It had been expected to retain its full 20%, but apparently is considering whether the market is hot enough to cash in now.
“The group is analyzing the opportunity of selling 10 percent of UMG shares to an American investor or initiating a public offering (IPO) of at least 5 percent and up to 10 percent of UMG shares,” Vivendi said Tuesday in an update to investors. “Furthermore, Vivendi will retain 10 percent of the UMG share capital for a minimum period of two years in order to remain associated with the development of its subsidiary” while also “benefiting from the protection of EU legislation applicable to parent companies and subsidiaries from different member states.” Vivendi also told investors that there will be no “poison pill” to protect against a hostile takeover after the IPO.
UMG was valued at a whopping $53 billion — up from $36 billion last year — last month in Goldman Sachs’ annual “Music in the Air” study, is widely recognized in the music industry as an optimistic but authoritative survey of the business, demonstrating the perceived strength of the recorded-music and publishing businesses, which are primary among UMG’s many properties, despite the pandemic that has flattened other sectors of the industry, particularly live entertainment.