Pershing Square buys an additional 2.9% of Universal Music for $ 1.15 billion


The logo of French media giant Vivendi is pictured in Paris, France, August 12, 2020. REUTERS / Charles Platiau / File Photo

PARIS, Aug.31 (Reuters) – US hedge fund manager Bill Ackman, Pershing Square, is buying an additional 2.9% of Universal Music Group (UMG) from Vivendi (VIV.PA) for $ 1.149 billion, announced on Tuesday the French conglomerate.

Vivendi said the transaction was based on an enterprise value of 35 billion euros ($ 41.40 billion) for 100% stake in UMG.

The deal, which is due to be finalized on September 9, means Pershing Square will own 10% stake in UMG after buying a 7.1% stake in Vivendi in August, the French company added. Read more

The transaction precedes the distribution of 60% of UMG’s capital to Vivendi shareholders and the company’s initial public offering scheduled for September 21.

UMG, which represents artists like Justin Bieber and Taylor Swift, is benefiting from a rebound in the music industry, supported by booming streaming revenues but also by a recent increase in vinyl and CD sales.

In January, Vivendi announced that a consortium led by Chinese media group Tencent (0700.HK) had purchased an additional 10% stake in UMG, raising its stake to 20%. Tencent has grown globally with stakes in Spotify (SPOT.N) and Warner Music Group (WMG.O). Read more

In addition to UMG, Vivendi’s media assets include pay-TV company Canal +, communications group Havas, video game company Gameloft, video-sharing company Dailymotion, as well as other publishing and entertainment companies.

The French conglomerate has announced its intention to use the proceeds of UMG’s operations to reduce its financial debt and finance share buybacks and acquisitions.

Billionaire Ackman originally aimed to make the UMG investment through a Special Purpose Acquisition Company (SPAC), but he now buys through his Pershing fund instead after the initial plan met obstacles. Read more

($ 1 = € 0.8455)

Report by GV De Clercq; Editing by Louise Heavens and Pravin Char

Our Standards: Thomson Reuters Trust Principles.

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