In Vivendi’s announcement, which got here on the unusual hour of two p.m. ET on Fathers Day, apparently to seize a time when the worldwide inventory markets are closed, the corporate mentioned the settlement could be finalized no later than Sept. 15. UMG is headed for an IPO later this 12 months.
Ackman, a hedge fund billionaire, introduced almost a 12 months in the past his curiosity in aligning with an organization of such dimension for his SPAC often called Pershing Square Tontine Holdings. The discussions place the valuation of UMG — house to Lady Gaga, Taylor Swift and Drake, amongst many others — at $40 billion. Should the deal shut, which might take a couple of weeks, in response to an insider who confirmed the talks have been ongoing, the difficult settlement would mark the largest SPAC transaction so far, per the Wall Street Journal, which first reported the information.
In a observe to UMG workers on Sunday, chairman/CEO Lucian Grainge wrote: “This investment represents a strong validation of UMG, our strategy, our people, our legendary catalog and our amazing roster of artists and songwriters. And the fact that we now have, in addition to Vivendi, two committed investors—the consortium led by Tencent, as well as [Pershing Square Tontine] — is as powerful an endorsement as one could imagine from the investment and technology communities.”
Vivendi had beforehand introduced that UMG could be spun off as a standalone entity to commerce on Euronext after Vivendi distributes 60% of UMG to its shareholders by September. Additionally, China’s Tencent acquired 20% of UMG, leaving 20% to Vivendi, to which it was contemplating promoting half, as reported by Variety on May 18.
Pershing Square additionally owns stakes in Chipotle, Domino’s Pizza, the Lowe’s house enchancment chain and Hilton Hotels however had not beforehand held some other media or leisure properties.
UMG was valued at a whopping $53 billion — up from $36 billion final 12 months — final month in Goldman Sachs’ annual “Music in the Air” examine and is well known within the music trade as an optimistic however authoritative survey of the enterprise, demonstrating the perceived power of the recorded-music and publishing companies.
In Vivendi’s earnings report final month, UMG’s revenues have been up 9.4% due to the expansion in subscription and streaming revenues (which was up 19.6%). Recorded music revenues grew by 10.8%, whereas bodily gross sales have been up 14.8%, pushed by greater gross sales of recent launch and catalog titles.
New releases from Justin Bieber and Olivia Rodrigo, in addition to continued gross sales from The Weeknd, Ariana Grande and Pop Smoke, have been among the many most consumed for the primary quarter of 2021, boosting the recorded music and publishing items’ backside line. The cancellation of touring for a lot of 2020 and into 2021, nonetheless, did have an effect on merchandising and different revenues, which have been down 10.0%.