PARIS: French tycoon Vincent Bollore will retain strong influence over Universal Music Group as a major shareholder following its planned 30-billion-euro ($36 billion) spin-off on the stock market by media conglomerate Vivendi .
Vivendi is seeking to extract the most value from its crown-jewel asset, the world’s biggest music label and home to singers such as Lady Gaga and Taylor Swift, as the music industry rebounds from a long downturn thanks to streaming revenues.
The French conglomerate outlined plans at the weekend to distribute 60% of Universal’s capital to its current shareholders via a listing in Amsterdam.
The news triggered a rally in Vivendi’s shares in early Paris trading on Monday, valuing the group close to 31 billion euros ($38 billion).
Vivendi’s market value is about the same as the enterprise value that it placed on Universal before it sold two blocs of 10% in the music label to a consortium led by Chinese group Tencent, in March 2020 and January this year.
“The whole transaction is aimed at freeing up the hidden value of Vivendi, whose market value has been inferior to that of Universal’s itself lately,” a source close the matter said.
At the end of this IPO process, which has to be approved by a shareholders meeting at the end of March, Universal’s three biggest shareholders would be Vivendi (20%), the Tencent-led consortium (20%) and Bollore (16%).
As Bollore controls Vivendi via a 27% stake, this means directly and indirectly he will control some 36% of Universal.
Vivendi had previously said that it would list Universal by the start of 2023 at the latest.
However several institutional investors pressed the conglomerate to move more quickly, to take advantage of financial markets flush with cheap money, prompting Bollore to accelerate the timetable, according to the same source.