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

Credit: REUTERS/GONZALO FUENTES

Universal Music Group is valued at around 33.5 billion euros ($39.30 billion) ahead of the famed record label's spin-off from France's Vivendi and stock market debut in Amsterdam on Tuesday.

By Matthieu Protard and Gwénaëlle Barzic

PARIS/AMSTERDAM, Sept 20 (Reuters) - Universal Music Group is valued at around 33.5 billion euros ($39.30 billion) ahead of the famed record label's spin-off from France's Vivendi VIV.PA and stock market debut in Amsterdam on Tuesday.

Vivendi on Monday set the reference price for the listing at 18.5 euros per share, according to a statement issued by Euronext.

Universal Music Group's (UMG) spin-off will be Europe's largest listing this year and will hand 60% of shares to Vivendi shareholders.

Universal, the business behind singers such as Lady Gaga, Taylor Swift and The Weeknd, is betting that a boom in streaming that has fuelled recent revenue and profit growth still has a long way to run, in a music industry it dominates along with Warner WMG.O and Sony Music, part of Sony Group Corp 6758.T.

Its flotation carries high stakes for Canal+ owner Vivendi, which hopes in the longer run to rid itself of a conglomerate discount, which it believes has weighed on its shares. However, its listing raises questions about Vivendi's strategy once it parts ways with its cash cow, in which it will retain only a 10% stake.

Several high-profile investors have also already snapped up chunky Universal stakes, banking the group's back catalog of superstars, including the Beatles, and its push into social media app deals will sustain its performance and valuation.

U.S. billionaire William Ackman, who suffered a setback when his attempt to invest in Universal via a special purpose acquisition vehicle (SPAC) hit a snag with regulators and investors, will have a 10% stake after the listing via his Pershing Square hedge fund.

As well as Ackman, whose songwriting grandfather sold lyrics that are now owned by the music group, China's Tencent 0700.HK will also hold 20%.

($1 = 0.8524 euros)

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(Additional reporting by Toby Sterling; Writing by Sarah White; Editing by David Evans and Lisa Shumaker)

((sarah.white1@thomsonreuters.com; + 33 (0) 1 49 49 56 85;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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