Universal Music valued around $39 billion ahead of stock market debut

The brand of Common Music Group (UMG) is seen at a constructing in Zurich, Switzerland July 20, 2021. REUTERS/Arnd Wiegmann/File Picture

PARIS/AMSTERDAM, Sept 20 (Reuters) – Common Music Group, the enterprise behind singers similar to Woman Gaga, Taylor Swift and The Weeknd, is valued at round 33.5 billion euros ($39.30 billion) forward of the file label’s inventory market debut in Amsterdam on Tuesday.

France’s Vivendi (VIV.PA) is spinning off Common and on Monday set a reference worth for the itemizing at 18.5 euros per share, in line with an announcement issued by Euronext.

Common Music Group’s (UMG) itemizing might be Europe’s largest this yr and can hand 60% of shares to Vivendi shareholders.

Common is betting {that a} increase in streaming led by Spotify (SPOT.N) that has fuelled royalty income and revenue development for a number of years nonetheless has a protracted technique to run, in a music business it dominates together with Warner (WMG.O) and Sony Music, a part of Sony Group Corp (6758.T). learn extra

Its flotation carries excessive stakes for Canal+ proprietor Vivendi, which hopes to rid itself of a conglomerate low cost. Nonetheless, the itemizing raises questions on Vivendi’s technique as soon as it elements methods with its money cow, through which it would retain solely a ten% stake.

A number of high-profile buyers have additionally already snapped up massive Common stakes, banking partly on the group’s again catalogue, which incorporates the likes of Bob Dylan and the Beatles. Additionally they hope offers with ad-supported software program and social media platforms similar to Alphabet Inc’s (GOOGL.O) YouTube and TikTok will maintain its efficiency and valuation.

U.S. billionaire William Ackman suffered a setback when his try and put money into Common by way of a particular objective acquisition car (SPAC) hit a snag with regulators and buyers. Nonetheless, Ackman nonetheless bought a ten% stake by way of his Pershing Sq. hedge fund. China’s Tencent (0700.HK) owns 20% of Common.

One winner within the itemizing might be Vincent Bollore, the French media tycoon who’s Vivendi’s controlling shareholder. He’ll obtain Common shares price 6 billion euros at Monday’s worth.

Bollore has been an aggressive consolidator in France’s media and publishing panorama, and he has a long-held ambition to construct up a southern European media powerhouse.

Vivendi itself could undergo within the quick run, nonetheless, and shares are anticipated to fall Tuesday as they start buying and selling with out Common.

BNP Paribas, Natixis, Credit score Agricole, Morgan Stanley and Societe Generale are the lead monetary advisers on the deal, out of 17 banks in complete — an unusually massive complete.

The payment pot is predicted to be under normal listings as no recent money is being raised as a part of the spin-off.

Common mentioned in its prospectus that the general bills to be paid in relation to the Common deal wouldn’t transcend 0.5% of the overall quantity of the share distribution.

The itemizing is the most recent win for Euronext in Amsterdam, which has grown as a monetary centre within the wake of Britain’s departure from the European Union. Earlier than Common, Amsterdam had attracted a file 14 IPOs thus far this yr, of which 10 had been SPACs.

However the one Amsterdam itemizing of a measurement similar to Common in latest historical past was the 95 billion euro itemizing of know-how investor Prosus (PRX.AS), additionally a spin-off, in September 2019.

($1 = 0.8524 euros)

Extra reporting by Toby Sterling; Writing by Sarah White; Enhancing by David Evans and Lisa Shumaker

Our Requirements: The Thomson Reuters Belief Ideas.

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