On the eve of the listing of UMG, the introductory price was set at 18.50 euros per share, according to a press release released Monday evening, a valuation of some 33.5 billion euros. When the Breton billionaire took control of Vivendi in 2014, he got his hands on this musical subsidiary managed from Santa Monica, at the gates of Los Angeles (California), and which went through the MP3 and piracy crisis with two other giants of the Warner and Sony sector. The group is the owner of the famous Abbey Road studios, which housed the Beatles and Lady Gaga, as well as Kanye West and Amy Winehouse, of EMI Records (Justin Bieber, Keith Richards, Metallica) and Capitol Records (Katy Perry, Paul McCartney ).
In 2020, he also offered the rights to the entire catalog of Bob Dylan songs, one of the most significant acquisitions in the history of music. Thanks to the boom in streaming and unlimited subscription listening offers, UMG has become Vivendi’s goose that lays golden eggs, generating sales of 7.4 billion euros in 2020, i.e. 46% of the group’s income.
For the management of Vivendi, owner in particular of the Canal group, the communications giant Havas and the publisher Editis, the time has come to let Universal continue on its own and to refocus Vivendi on publishing, advertising and media. Previously, 20% of UMG had been sold to a consortium led by the Asian colossus Tencent, then 10% to financier Bill Ackman.
While the valuation of the French giant has hitherto relied heavily on its subsidiary, “we will have to demonstrate that there are really synergies within the group”, analyzes Thomas Coudry, of Bryan Garnier & Co. This operation also pursues another goal: by distributing 60% of UMG to its shareholders via an exceptional dividend in kind, Vincent Bolloré, Vivendi’s largest shareholder with 27% of the shares, first uses himself by recovering 18% of the shares. actions (around 6 billion euros).
Better, it does so by minimizing its tax under the tax exemption of dividends between a group and its subsidiary within the European Union. And, thanks to the 10% retained by Vivendi and to concerted management announced with Tencent, he will retain a certain influence in the major. Finally, Vivendi, whose cash is now full but which fears a hostile transaction on the occasion of the expected drop in its price following the detachment of UMG, took advantage of the enthusiasm of its shareholders to obtain authorization to buy back. up to 50% of its own shares.
This “rather extraordinary” limit, according to an activist who had expressed his reservations about the initial project, is sold as a means for the group to defend itself against any hostile attack before the redeployment of its activities. Vivendi notably announced that it intended to swallow Lagardère by the end of 2022, and remains committed to the operator Telecom Italia. But some analysts also see it as a possibility for Vincent Bolloré to strengthen considerably at a lower cost in Vivendi’s capital if these titles were to be canceled.
The calendar is conducive to asset transactions: the businessman mentioned the date of February 17, 2022, the bicentenary of the creation of the group that bears his name, to make way for his children. The Bolloré group has, however, committed itself in a letter: if it were to cross the threshold of 30% of the capital in this way, it would not derogate from its obligation to file a takeover bid on Vivendi.
© 2021 Prisma Media – All rights reserved