Investors tune in as Universal leaps on market debut By Reuters

© Reuters. FILE PHOTO: The brand of Common Music Group (UMG) is seen at a constructing in Zurich, Switzerland July 20, 2021. REUTERS/Arnd Wiegmann/File Photograph

(Repeats so as to add hyperlinks to Breakingviews column)

By Toby Sterling and Sudip Kar-Gupta

AMSTERDAM (Reuters) -Common Music Group’s shares leapt greater than a 3rd of their inventory market debut on Tuesday as traders wager a growth in music streaming nonetheless has a protracted option to run.

The world’s greatest music label, which represents musicians and track catalogues from Billie Eilish to The Rolling Stones and Bob Dylan, noticed its market worth leap to 47 billion euros ($55 billion) in Europe’s largest itemizing of the yr.

The corporate was spun off by France’s Vivendi (OTC:), which handed a 60% stake in Common to its shareholders. Vivendi noticed its market worth drop by two thirds to about 12 billion euros, in line with Refinitiv Eikon knowledge, because it refocuses on different media property akin to pay TV model Canal+.

Huge winners from the Amsterdam itemizing embody U.S. hedge fund billionaire William Ackman and China’s Tencent, alongside Vivendi’s controlling shareholder Vincent Bollore, who’re retaining massive slices of Common.

Common Chairman and CEO Lucian Grainge may also get bonuses linked to the itemizing that would add as much as as a lot as $400 million.

Common’s shares have been buying and selling at 24.97 euros by mid-session buying and selling, up round 35% from their reference worth of 18.50 euros. Shares in Bollore, which holds 27% of Vivendi, have been up 2.4%, whereas the Amsterdam-listed shares of Ackman’s Pershing have been up 4%.

Common’s sturdy debut is a vindication for Ackman, who was compelled into an embarrassing u-turn after U.S. regulators blocked his plans to speculate into Common through his particular function acquisition firm in July.

Ackman, whose grandfather was a song-writer, as a substitute opted to take a ten% stake through his essential Pershing Sq. hedge fund, which is now sitting on a paper acquire of greater than 30%.


Common, whose different hit singers and catalogues embody Justin Bieber and The Beatles, hopes to construct on offers with ad-supported websites akin to TikTok and YouTube in addition to streaming providers akin to Spotify (NYSE:).

“I consider that we’re solely initially of the following wave of progress as music subscription and ad-supported consumption is scaling globally and has a protracted runaway forward,” Grainge instructed Reuters.

His windfall from the itemizing comes on high of the 17.5 million-euro money bonus he obtained in February after a Tencent-led consortium purchased a ten% stake in Common.

A part of Common’s enterprise derives from the rights connected to its large catalogue, and it additionally collects royalties for the artists it represents throughout social media platforms.

The COVID-19 pandemic hit reside live shows and Common’s merchandising enterprise, however ad-supported revenues have picked up after a blip.

Its flotation carries excessive stakes for Vivendi, which hopes within the longer run to rid itself of a conglomerate low cost that it believes has weighed on its shares.

Vivendi mentioned final week it was set to buy one other stake in Lagardere, paving the way in which for a possible full takeover of the Paris Match journal proprietor.

Common has grown income for six years in a row. It has forecast income progress of no less than 10% this yr and within the excessive single digits after that.

The itemizing is the newest win for Euronext in Amsterdam, which has grown as a monetary centre since Britain’s departure from the European Union. Earlier than Common, Amsterdam had attracted a file 14 IPOs this yr.

Separating from Common deprives Vivendi of its most respected asset. Vivendi mentioned on Tuesday it will now personal 10.13% of Common’s shares.

The deal was dealt with by 17 banks that are anticipated to make a mixed $60-$65 million in charges from advising Vivendi and Common, with BNP Paribas (OTC:) and different lead advisers taking the biggest share, in line with Refinitiv estimates.

($1 = 0.8522 euros)

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