“As you can see from PSTH’s announcement, this investment represents a strong validation of UMG, our strategy, our people, our legendary catalog and our amazing roster of artists and songwriters,” UMG CEO Lucian Grainge wrote in a employees memo on Sunday. “And the fact that we now have, in addition to Vivendi, two committed investors — the consortium led by Tencent, as well as PSTH — is as powerful an endorsement as one could imagine from the investment and technology communities.”
Grainge added, “On Tuesday, at Vivendi’s General Shareholders’ Meeting, shareholders will consider Vivendi’s proposal to distribute 60% of the UMG share capital and list UMG’s shares on the Euronext Amsterdam stock exchange. I will keep you updated on all these developments.”
Vivendi beforehand offered a 20 % stake in UMG to a consortium led by Chinese language on-line big Tencent. It has stated it plans to distribute 60 % of UMG, whereas retaining the remaining 10 % for a minimal interval of two years.
UMG is the world’s greatest music label and follows Warner Music to the general public markets. Warner Music IPOd in 2020, with a $15 billion valuation. it’s at the moment valued at slightly below $18 billion. The rise of streaming companies like Spotify and social platforms like TikTok have considerably bolstered the music enterprise lately.
Clean examine firms, or Particular Objective Acquisition Corporations (SPACs), take over privately held companies and normally take them public in an alternative choice to a conventional IPO. Over the previous year-plus, Wall Road has seen an enormous variety of SPAC IPOs.
This deal could be completely different, nevertheless, with UMG nonetheless set to go public through an IPO within the third quarter of 2021. As a substitute, Pershing Sq. Tontine stated it would have about $1.5 billion left over after the UMG deal is full, which it would use to try to discover one other firm to take public. The corporate may also create what it calls a “SPARC,” which might be given to shareholders, commerce individually and which may also search to merge with one other non-public firm.
The deal is topic to the authorization of the plan to take UMG public by Vivendi shareholders at a shareholder assembly on June 22. The transaction could be the most important SPAC deal on report, in response to Dealogic knowledge.
Vivendi, led by CEO Arnaud de Puyfontaine, has beforehand stated: “In addition, the Pershing Square funds and their affiliates have indicated that they may acquire additional economic exposure to UMG by acquiring Vivendi securities and/or by acquiring UMG securities following the distribution of UMG shares by Vivendi.”
Alex Weprin contributed to this report.
This text was initially revealed by The Hollywood Reporter.