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Vivendi's Universal Music is Hitting all the Right Notes Lifting Shares in Investor Bolloré

French conglomerate Bolloré’s stock jumped on Friday after record results at Universal Music and strong earnings in its logistics businesses.

French conglomerate Bolloré’s stock jumped on Friday after record results at Universal Music and strong earnings in its logistics businesses.

French conglomerate Bolloré’s stock jumped on Friday after record results at Universal Music and strong earnings in its logistics businesses.

Shares in the company, which owns around a quarter of Universal Music owner Vivendi and operates ports and logistics in Africa, rose 4% on Friday.

The back story

The conglomerate, led by French billionaire businessman Vincent Bolloré, holds a 26.3% stake in media giant Vivendi, which under a quirk of French ownership rules effectively gives it control of the company.

Vivendi has worked to divest up to 50% of Universal Music Group (UMG) and the level of interest has sent its valuation soaring.

Vivendi’s first-half results also helped boost the valuation after revealing that UMG’s earnings grew 44%.

Last month Chinese tech giant Tencent began talks to buy a 10% chunk of Vivendi’s stake in Universal Music, in a deal worth $3.3 billion.

Vincent Bolloré has also been embroiled in a battle with Silvo Berlusconi to stop the former Italian Prime Minister’s Mediaset company from merging its Spanish and Italian businesses to create a pan-European streaming service to rival Netflix.

Vivendi is Mediaset’s second-biggest investor with a stake of around 29%.

What’s new.

Revenue in the first half of 2019 grew 4% to €11.78 billion, driven by Vivendi.

Oil logistics revenue rose 1% due to higher prices, while income at its African logistics business also climbed 1% on increased traffic at its port terminals.

While operating income rose 27% to €919 million, net income fell to €42 million - compared to €377 million the previous year - due to a lower revaluation of Spotify, in which UMG holds a stake.

Moving forward.

Bolloré’s shrewd investments over the years continue to reap the rewards and Universal Music continues to perform well.

The 27% rise in first-half core earnings is also encouraging and shows the strength of its logistics units.

Vivendi’s patience over the sale of a partial sale of Universal Music and its subsequent rising value, along with the earnings rise, will be music to the ears of investors.

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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