Vivendi has confirmed plans for its UMG IPO.
It’s a move that’s Vivendi’s institutional shareholders have been pushing for and the public listing is now set to take place by the end of the year.
During the past year, a Tencent consortium has already acquired 20% of UMG based on an enterprise value of €30 billion.
According to an announcement today (February 13) by Yannick Bolloré, chairman of Vivendi’s supervisory board, and Vivendi CEO Arnaud de Puyfontaine, this transaction for 20% of UMG “has confirmed its attractiveness with strategic investors”.
As a result of that deal, the Vivendi Management Board has announced plans for the distribution of 60% of Universal Music Group’s share capital to Vivendi shareholders. This distribution would take the form of special dividend.
The listing of the shares of a UMG holding company – currently being incorporated in the Netherlands – would be applied for on the Euronext stock exchange in Amsterdam. According to a statement, the Netherlands is “a country which has been one of UMG’s historical homes”.
In a memo seen by Music Week, UMG CEO & chairman Sir Lucian Grainge said: “I couldn’t be prouder: not only is this a validation of our strategy, our teams, and our unprecedented record of success, it’s a natural evolution in the storied history of our company that will enable our entrepreneurial and creative culture to continue to soar.”
“This plan is the result of the joint efforts in recent years by the Vivendi and the Universal Music Group, under the leadership of Sir Lucian Grainge, to further the company’s position as the music industry’s undisputed leader,” said Yannick Bolloré and Arnaud de Puyfontaine in a memo.
“UMG has strengthened its worldwide leadership by focusing on its creative DNA and uniqueness: talent, both new and established, both local and global. At the same time, UMG has succeeded in leading the massive transformation in consumer adoption of streaming and subscription.”
The statement added: “UMG would be in a position to take advantage of greatly increased financial flexibility to pursue its dynamic growth and its pioneering role in the music and entertainment industry, to the benefit of artists and fans everywhere.”
Vivendi said the transaction has received an initial favourable response from the Tencent-led consortium, who will examine the planned listing.
A Vivendi extraordinary shareholders’ meeting will be called for March 29, 2021 to modify the company’s by-laws and make this distribution possible. Subject to a positive shareholder vote, Vivendi will continue to work on this project, including a shareholders’ meeting to approve the distribution and subsequent completion of the transaction before end 2021.
The full memo from Sir Lucian Grainge to UMG staff is below.
I wanted to update you with news about Vivendi’s previously announced initiative to publicly list UMG’s stock.
As detailed further in the following letter from Vivendi’s Supervisory Board Chairman and its Management Board Chairman & Chief Executive Officer, the Vivendi Board approved a proposal that aims to spin off UMG as a standalone listed company and have it trade on the Euronext Amsterdam stock exchange by the end of 2021.
I couldn’t be prouder: not only is this a validation of our strategy, our teams, and our unprecedented record of success, it’s a natural evolution in the storied history of our company that will enable our entrepreneurial and creative culture to continue to soar.
We’ll continue to drive towards our strategic goals – full steam ahead. We’ll remain committed to our artists and songwriters. And we’ll continue to innovate and help lead the music community towards an incredible next chapter.
In short, as I’ve said many times, we’ll stay true to our mission: harnessing our collective talents and resources to shape culture through the power of music. When, in collaboration with artists, we come together as a company, what we can achieve is truly remarkable.
With appreciation for everything you do,