Vivendi Enters Talks With Pershing Square Funds to Sell 10% of UMG

Vivendi has entered into discussions with Pershing Square Tontine Holdings, Ltd. (PSTH), to sell 10% of Universal Music Group’s (UMG BV) share capital ahead of its planned IPO.

The sale of 10% would be based on an enterprise value of €35 billion ($42.3 billion) for 100% of the UMG BV share capital. The deal would have to be approved during Vivendi’s shareholders meeting on June 22. Vivendi is also planning to distribute 60% of the UMG share capital amongst shareholders before listing the company.

The Pershing Square funds and their affiliates, which are represented by CEO Bill Ackman, “have indicated that they may acquire additional economic exposure to UMG by acquiring Vivendi securities and/or UMG securities following the distribution of UMG shares by Vivendi,” said the company.

Vivendi plans to list 60% of its share of Universal Music Group on the Euronext market in Amsterdam by the end of the year, with a minimum target value for the company nearing €30 billion.

The Paris-headquartered group, which is also the parent company of Canal Plus Group, previously sold 20% of UMG to Tencent late last year for €6 billion.

UMG saw its revenues go up 9.4% during the first quarter of 2021 thanks to the growth in subscription and streaming revenues. Recorded music revenues grew by 10.8%, while physical sales were up 14.8%, driven by bigger sales of new release, including King & Prince and Justin Bieber, as well as continued sales from The Weeknd, Ariana Grande and Pop Smoke.

UMG has been a major source of financial resilience and growth of Vivendi, which posted a 5% revenue increase to €3.9 billion ($4.6 billion) during the first quarter of 2021.

Source