Chinese conglomerate Tencent Holdings is set to see a handsome uplift in the value of its 20% stake when Universal Music Group floats on 21 September.
The world’s largest music company is being spun out of French media giant Vivendi and is set for a stock market valuation north of €33bn when trading starts on Euronext’s Amsterdam stock exchange next week. A technical reference point is expected to be set on Monday, 20 September, with analysts at Morgan Stanley (NYSE:MS) suggesting the company is now worth around US$49bn.
Vivendi will distribute 60% of Vivendi shares to Vivendi shareholders.
Special purpose acquisition company (SPAC) Pershing Square Tontine Holdings, led by hedge fund manager Bill Ackman, has a 10% stake in Universal for which it paid about US$4bn, which would imply a stock market valuation of US$41bn for Vivendi, while China’s Tencent has a 20% stake for which it paid roughly US$6bn.
Universal numbers Taylor Swift, Ariana Grande, Lady Gaga, Justin Bieber and the Rolling Stones among its artists. It acquired EMI in 2012, which once boasted of being the largest record company in the world, so it also controls the back catalogue of The Beatles and Bob Dylan.
The group said last month that it expects further revenue growth this year, driven by the boom in streaming revenues, and indicated it would be a dividend-paying stock when its shares are listed.
The board will be “comprised primarily of non-executive members, a majority of whom will be independent”, Vivendi said. Neither Vivendi nor Group Bolloré, which owns 27% of Vivendi’s share capital, will have any representation on the board.