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Vivendi shares soar on plan for Universal Music spin-off
Vivendi owns 80 percent of UMG, whose artists and catalogue range from the Beatles to Lady Gaga, after recently selling 20 percent to China's Tencent group.
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A view of the Universal Music Group (UMG) headquarters is seen on February 9, 2021 in Santa Monica, California. UMG and TikTok announced on February 8, 2021 a global agreement that (Agence France Presse/Valerie Macon)
I
nvestors flocked into the French media conglomerate Vivendi on Monday after it unveiled plans to spin off the lucrative Universal Music Group, a move long sought by analysts as well as its own top shareholders.
Vivendi owns 80 percent of UMG, whose artists and catalogue range from the Beatles to Lady Gaga, after recently selling 20 percent to China's Tencent group.
In December, Universal shocked many in the industry by announcing a deal to secure the rights to Bob Dylan's entire back catalogue of songs, reportedly for more than $300 million.
On Saturday, the company said it would study the distribution of 60 percent of UMG to Vivendi shareholders in order to reduce what it called a "conglomerate discount."
"Vivendi's leading institutional shareholders have been pressing for a number of years for a split or the distribution of Universal Music Group," it said.
Vivendi said UMG, which would be listed on the Amsterdam stock market, could be worth at least 30 billion euros ($36.4 billion).
The deal, set to be voted on at a shareholder meeting in March, sent Vivendi's stock rocketing 18 percent higher to 30.82 euros in Paris.
The company's other assets range from movies and TV production to publishing and advertising.
"In 2022, Vivendi should be refocused on all its other main units (mainly Groupe Canal+, Editis and Havas) alongside its minority holdings" including UMG as well as Lagardere, Prisa and Spotify," the Paris brokerage OddoBHF commented in a note.
