Shares in Vivendi rose more than 16% on Monday after the French media group said it could expand Universal Music Group’s business in Amsterdam and distribute 60% of its capital to investors by the end of the year. year, as it looks to capitalize on the rising value of music assets.
The listing would bring UMG, the world’s largest music company and is home to singers including Lady Gaga, Taylor Swift, and Kanye West, VIV,
the power of fire to compete with rivals Warner Music Group WMG,
and Sony Music Entertainment, among a rise in music streaming services.
Read: 5 reasons why musicians like Bob Dylan, Neil Young and Stevie Nicks are currently selling their song catalogs
Vivendi 0IIF,
controlled by billionaire Vincent Bollore, announced the plan Saturday after it ended the sale of a 10% stake in UMG to a consortium led by Tencent Holdings 700,
valued at UMG at € 30 billion ($ 36.4 billion). The Tencent-owned group now owns 20% of the unit.
The deal, “in addition to interests expressed by other investors at potentially higher prices, has now allowed the Board of Directors to consider a 60% circulation of UMG’s share capital to Vivendi VIVHY,
shareholders, ”the company said in a statement Saturday.
She said Vivendi ‘s major institutional shareholders have been pushing for several years for the separation or circulation of UMG “to reduce Vivendi’ s large-scale discount. ”Following the flotation, Vivendi would have 20% UMG, led by its chairman and CEO, Sir Lucian Grainge
Vivendi stocks rose 16.86% in early European trading on Monday, while shares in Groupe Bollore, which owns 27% in Vivendi, rose 13.30%.
Stock market listing would give UMG more financial power to take out contracts and cash in on the ever-growing rise in streaming services like Spotify and Apple Music AAPL,
as well as social apps like TikTok and Instagram, which allow songs to be used in posts by their users.
Read: Warner Music stock gains as profit falls, but revenues rise to forecasts
Analysts at UBS reported that UMG – the world’s largest music label and publisher – with nearly twice the competitive revenue of Warner Media Group, has consistently delivered share gains in the top 3 last year. “Following a split, we see significant opportunities to unlock value through asset sales, M&A and capital management,” they said.
Warner WMG Music Group,
made its first market capitalization of Nasdaq in June last year, raising $ 1.9 billion, to give the company a market valuation of nearly $ 16 billion.
Read: Neil Young is beating the heart of the gold by selling 50% of a song catalog to the publishing house
A series of high-profile artists hit winning contracts to sell their music rights in recent weeks as songwriters’ catalogs get sale prices 10 to 18 times annual awards, compared to 8 to 13 times in previous years.
Hipgnosis Song Fund Listed in London SONG,
has been one of the most progressive performers, announcing contracts for music rights with former rock star Neil Young, Fleetwood guitarist Mac Lindsey Buckingham, and recording producer Jimmy Iovine this year.
Vivendi said shareholders will be asked to approve the plan to roll out UMG at a meeting on March 29. The company also said it will propose an allotment of € 0.60 per share for 2020 at a shareholders’ meeting scheduled for June.