This Sunday, June 20, the company led by the American financier Bill Ackman signed an agreement with Vivendi. The latter wants to sell it 10% of UMG's capital. Vivendi said in a statement that the acquisition was announced in early June. It "should be completed in the coming weeks, by September 15 at the latest".
In July, Spac's Pershing Square Tottine Holdings (PSTH) raised $4 billion in its initial public offering. This project is owned by Bill Ackman, who has decided to include UMG. For Vivendi, the deal will remain subject to "the non-exercise of retraction rights by PSTH shareholders and U.S. regulatory proceedings."
In announcing the negotiations, Vivendi said that Pershing Plaza Fund and its affiliates had expressed interest in gaining additional exposure to UMG in the market. They want to buy shares of the French group or acquire shares after the stock distribution.
According to Vivendi, "the arrival of major American investors is further proof of UMG's success and global attractiveness. The company is currently worth 35 billion euros. In May, Vivendi announced its intention to list UMG in the Netherlands by September 27. To this end, the media giant plans to allocate 60% of UMG's capital to shareholders of the group controlled by Vincent Bolloré.
In the meantime, the whole operation will have to be validated by Vivendi's shareholders at the annual general meeting scheduled for June 22: that is, today. If completed, UMG will have four major shareholders. They are Chinese tech giant Tencent ( which has acquired a 20% stake in Vivendi), the Bolloré group (18%), Pershing Square Tontine (10%) and Vivendi (10%).
The amount that Vivendi will obtain from this new operation (approximately 3.1 billion euros) will allow the group to make acquisitions or implement major share buyback programs. In addition, Vivendi has asked its shareholders to allow it to buy back 50% of UMG's shares.
This request is explained as a way for the Bolloré Group to strengthen its control over Vivendi. The project has also drawn criticism from investment funds. They fear a "sub-optimal distribution" of UMG shares and tax consequences for some shareholders.
Streaming media is attracting more and more paying users and UMG is one of the "giants" of the sector. It clearly dominates the global music market and has a very large catalogue ranging from The Beatles to Rihanna and others.
Headquartered in Santa Monica, California, the company reported first quarter revenues of €1.8 billion, up 2.2%.
However, the agreement signed by Vivendi and Ackman has attracted the interest of several hedge funds. This is notably the case of Third Point, a New York-based hedge fund. The latter is owned by the undisputed businessman Daniel Loeb and has shown interest in the French subsidiary.