Vivendi SA, the French media giant has signalled its intention to list its most prized asset, Universal Music Group within the next three years.
This has surprised some as the firm had previously said that an initial public offering of Universal would be too complex. However, thanks to a year of record profit the temptation to list the music group has proved too great for the conglomerate.
Vivendi, which counts Taylor Swift, Drake and Lady Gaga on its roster, could also have been provoked into action by the Warner Music Group. The smaller rival, which has the likes of Katy Perry and Ed Sheeran on its books, recently announced its intention to list in the near future.
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The group had already sought further investment late last year when a consortium led by Chinese technology giant Tencent purchased a 10 per cent stake in Universal in a deal valuing the division at €30bn (£25bn, $32.5bn).
Vivendi CEO Arnaud de Puyfontaine has declined to elaborate on the potential flotation but instead emphasised Universal’s record success. The label’s annual earnings before interest, tax and amortisation (EBITA) surged by 22 per cent on the previous year, standing at €1.12bn.
Such gains helped the French parent company offset losses incurred by its second largest property, the French TV firm Canal Plus, which is struggling to compete with the likes of Netflix and Apple TV.
Overall, Vivendi’s total 2019 revenue grew 5.6 per cent on the year before, to €15.9bn.
News of the future IPO caused Vivendi’s share price to fall in Thursday trading and, while Friday’s early morning peak has not continued, the group stands up 0.67 per cent in early afternoon trading at €25.40.