Vivendi: Distribution of 60% of the capital of Universal Music Group (UMG)
OF 60% OF THE SHARE CAPITAL OF UNIVERSAL MUSIC GROUP (UMG)
A new era
Universal Music Group (UMG)
Vivendi has decided to open the capital of the world leader in music to new shareholders, to distribute 60% of the company’s capital to its own shareholders and to make
shares listed on the Amsterdam Stock Exchange.
The acquisition of 20% of the capital of UMG by a consortium led by Tencent generated a very good enterprise value of 30 billion euros (for 100% of the capital). Now that the valuation has been confirmed and Vivendi’s private investors are seeking a spin-off or a distribution of UMG to reduce the conglomerate’s discount on the Vivendi share price, the Management Board has approved a 60% distribution plan. of UMG’s capital to Vivendi shareholders.
An Extraordinary General Meeting met on March 29, 2021 to approve an amendment to Vivendi’s bylaws to allow the principle of this distribution in kind. This amendment was approved by 99.98% of the votes cast.
The General Meeting of Shareholders of June 22, 2021 was then an opportunity to explain this proposed transaction to shareholders (replay of the General Meeting on www.vivendi.com) and to put the associated resolutions to the vote. Here again, the Assembly overwhelmingly approved the operation (99.9% of the votes were positive).
Characteristics of UMG distribution and listing
Main information(1) on the operation:
- The shares will be distributed to holders of Vivendi shares.
A special dividend and an interim dividend will constitute the distribution in kind of UMG shares, which will be paid in a single transaction by the delivery of UMG shares
at the rate of one UMG share for each Vivendi share held, based on the valuation of UMG carried out by PwC and EY in February. If the ratio is adjusted,
fractional rights will not be negotiable or assignable. If the number of UMG shares to which a shareholder would be entitled by applying the adjusted ratio does not correspond to a whole number of UMG shares, the shareholder will receive the number of UMG shares immediately below this number, plus a payment in cash for the balance, the amount of which will be calculated on the basis of the price at which the UMG shares corresponding to the fractional shares were sold.
Taxation: distribution of UMG shares will be taxed as a dividend. Beneficiaries domiciled in France will have to pay social contributions and / or a non-fixed withholding or withholding tax. Withholding tax or income tax does not apply to income related to securities held in French stock savings plans (share savings plan – PEA), subject to compliance with the general conditions of the PEA system. The sums necessary for the payment of tax and social charges must be made available to the paying institution prior to the delivery of the shares. Shareholders
are invited to contact the financial intermediary holding their account.
Holders of Vivendi bearer shares held in a securities account or a PEA will have a new line on their account for their UMG shares (UMG shares will be eligible for the PEA). Holders of pure registered Vivendi shares held by Vivendi will receive
a letter from BNP Paribas Securities Services, which has been appointed
manage Vivendi’s securities services under the conditions for the allocation of shares. Holders of administered registered shares are invited to contact the financial intermediary holding their account.
- The listing of UMG shares on Euronext Amsterdam is sought.
Vivendi is currently working to obtain authorization from the Autoriteit Financiële Markten, the Dutch financial markets authority.
• UMG shares will be listed on September 21, 2021.
Vivendi’s share price will be adjusted on the day of the distribution of UMG shares.
- All the information relating to this distribution is contained in the Report on the exceptional dividend in kind and on the interim dividend in kind and can be consulted on Vivendi’s website at the following page: “General Meeting”.
New shareholders for UMG
Oonce the distribution has been made, UMG’s share capital will be 60% owned
by Vivendi shareholders, including 18% by the Bolloré Group, 20% by a consortium led by Tencent, 10% by Vivendi and 10% by investment funds in which the financier William Ackman holds major economic interests or is manager . Vivendi has undertaken to retain 10% of UMG’s share capital for at least two years in order to remain involved
in its development while benefiting from the protection of European legislation applicable to parent companies and subsidiaries in the various Member States.
The music sector has experienced strong growth since 2016, driven by a double-digit increase in the activity of music streaming platforms.
The growth should not stop there, as this listening model is spreading across the world, as evidenced by more than
400 contracts negotiated between UMG and these platforms.
As a result, financiers and
the stock market is increasingly interested in this sector.
To testify to this appetite, the enterprise value of UMG, estimated at less than 10 billion euros seven years ago, amounts to
30 billion euros (sale price in enterprise value of the 20% stake in UMG sold to the consortium led by Tencent) in March 2020 and January 2021, then to 33 billion euros (PwC and EY valuation of
equity value of the company used to prepare the IPO) in February 2021 and finally to 35 billion euros (enterprise value retained in negotiations with William Ackman) in June 2021.
Carried out by Vivendi’s Corporate Department and .
Vivendi SA published this content on 07 October 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on 07 October 2021 12:36:02 PM UTC.
Public now 2021
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