D.he French media group Vivendi has sold further shares in the Universal Music Group. 7.1 percent go to the hedge fund Pershing Square and Partners, run by Bill Ackman, as Vivendi announced on Tuesday evening. The purchase price was given at $ 2.8 billion, which according to Vivendi Universal comes to a valuation of 35 billion euros. On the basis of this assessment, Ackman can acquire a further 2.9 percent of the shares in the world’s largest music company by September 9th.
Both parties had already confirmed talks about a possible sale at the beginning of June. Initially, it was planned that Ackman would acquire 10 percent of Universal through a Spac (Special Purpose Acquisition Companies). It would have been the largest takeover of such a shell to date. In mid-July, however, he had refrained from this plan and referred to objections from the US Securities and Exchange Commission, but at the same time announced that he wanted to carry out the transaction instead – as has now happened – through his hedge fund.
Universal is expected to go public soon
Universal Music is Vivendi’s main subsidiary and the industry leader in the music recording market. The company has a large and valuable catalog of music. Most recently, the second album by superstar Billie Eilish was released through the label group Interscope / Geffen / A&M. The takeover of Bob Dylan’s author catalog at the end of last year caused a sensation in the publishing sector and the currently booming music rights business – and especially authors’ rights here.
For the first half of the year, Universal had recently recorded organic growth of 17.3 percent compared to the same period last year – primarily driven by income from streaming. 2.1 billion euros of the total turnover of around 3.2 billion euros from the most important area, the music recording business, was generated through the growing area. In total, sales amounted to 3.8 billion euros with an EBIDTA margin of 21.5 percent (822 million euros) after 18.8 percent in the first six months of 2020.
Vivendi wants to bring Universal to the stock exchange on September 21 and distribute 60 percent of the shares to Vivendi shareholders. According to this, the French group would still hold 10 percent in the music company after a consortium led by the Chinese Tencent group acquired 10 percent at the beginning of 2020 and exercised the option for a further 10 percent at the end of the year. At that time, Universal was valued at 30 billion euros.