AN IPO FOR UMG (UPDATE)

An IPO for Universal Music Group is in the cards, its parent company Vivendi announced today. Expect it to occur by early 2023.

Vivendi announced that UMG had record profits in 2019 of $1.21b.

UMG’s revenues were up nearly 19% to $7.8b with streaming rising 21.5% to $3.63b. Physical sales were up 3.1% to $1.1b and publishing was up 9.2% to $1.14b.

In a presentation, Vivendi noted its sale of 10% of UMG to Tencent and that the Chinese company has until 1/15/21 to purchase another 10% for about $3.25b. The IPO is “planned for early 2023 at the latest.”

The company said eight banks have been asked to assist it in the planning of the IPO.

During a conference call, Vivendi CEO Arnaud de Puyfontaine was short on details regarding the IPO but did say “we plan to use the majority of the proceeds for share buybacks.”

The decision to go the IPO route is a full 180 from Vivendi’s stance 18 months. In July 2018, de Puyfontaine said they ruled out the IPO options because of the complexity of the existing corporate structure at the time and “the market could have been skeptical on the reliability of our business model in emerging markets. We thus, at the time, considered that in five years time we will have a better vision and prospect for our model.”

CFO Herve Philippe added that they have not decided on a timeline for the IPO nor whether it will be through added or existing shares. “This is a goal to go to the market and to go through an IPO in 2023 at the latest,” he said.