Fri, May 24, 2019 - Page 10 News List

Universal eyes industry bidder as buyout firms balk

Bloomberg

Vivendi SA is targeting strategic buyers for a stake in Universal Music Group, as some private equity investors balk at the high price and slow pace of the deal, people familiar with the matter said.

The French company has floated a partial sale or an initial public offering of Universal for years and said in July last year it would try to sell as much as 50 percent of the world’s largest record group.

Vivendi has held talks with companies including Tencent Holdings Ltd (騰訊) about a minority stake, which could help Universal Music expand internationally, including in China, two of the people said.

However, a sale to the Chinese could also raise the ire of officials in the US, the biggest music market, amid trade tensions, one of them said.

Some suitors have also been dismayed by the minimum value of 25 billion to 30 billion euros (US$28 billion to US$33 billion) that Vivendi is seeking for the business, the people said.

Analysts’ estimates for Universal Music vary from US$20 billion to US$50 billion.

While the company only wants to sell a minority stake, some potential advisers have floated the idea of a majority stake to gauge interest and test valuations, they said.

Universal, home to artists Taylor Swift, Kanye West and Drake, has attracted private equity firms, sovereign wealth funds, and media and technology companies looking to grab a piece of the resurgent industry.

However, some of the initial enthusiasm has turned to frustration as the preparation creeps along, the people said.

Vivendi shares fell as much as 3 percent in early trading yesterday in Paris. They have gained 24 percent over the past two years, valuing the company at about 31.5 billion euros, compared with a 0.6 percent gain for the STOXX Europe 600 Media Index.

A spokesman for Vivendi said the sale is going according to the timing that has been set, declining to comment further.

A representative for Tencent declined to comment.

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