Universal Music is set to debut on the stock market.
The Beatles, Billie Eilish, and Taylor Swift are among the artists on Universal Music Group’s roster, and the company is preparing to make a significant stock market debut on Tuesday.
The corporation is based in the United States, but it is controlled by Vivendi, a French media behemoth that is selling a majority stake in the profitable unit on Amsterdam’s Euronext index.
Euronext will release UMG’s floating price later Monday, but Vivendi has already indicated a 33-billion-euro valuation at 18 euros per share.
Vincent Bollore, a French billionaire who has positioned himself as a formidable right-wing media baron in recent years, owns Vivendi.
Vivendi will keep a piece of Universal Music, but it plans to concentrate on TV, advertising, and publishing.
Music piracy was once a concern to Universal Music, as it was to rivals Warner and Sony, but profits have skyrocketed in the age of streaming.
It is home to some of the world’s most famous musicians, including Lady Gaga, Kanye West, and Metallica.
Last year, the firm paid $300 million for Bob Dylan’s complete song collection, making it one of the most expensive acquisitions in music history.
UMG, based in Santa Monica, California, has long been the crown jewel of Vivendi’s media empire, accounting for 46 percent of the parent company’s sales last year with a turnover of 7.4 billion euros.
Vivendi has already sold a 20% share in Universal to Chinese digital firm Tencent and a 10% stake to US financier Bill Ackman as it shifts its focus to other areas.
“We are putting in place the circumstances so that the value of Vivendi as a whole is greater than the sum of its parts,” Vivendi CEO Arnaud de Puyfontaine stated.
Recognizing that selling its most valuable asset could be dangerous, Vivendi has taken precautions to protect its stock price, which one activist shareholder has called as “very exceptional.”
Following the UMG floatation, it has gained investor approval for a large repurchase of up to half of its shares.
If the firm’s share price falls as projected as a result of the sale, it will have ample funds to defend itself against a hostile takeover bid.
Vivendi “will have to show that there are real synergies” to justify its value after the sale of UMG, according to Bryan Garnier & Co. analyst Thomas Coudry.
In the IPO, Vivendi will transfer 60% of UMG shares to its investors, while keeping 10% and preserving a joint-management agreement. Brief News from Washington Newsday.