Universal rocks it
Music Group’s shares take off after Euro IPO
Shares of Universal Music Group soared more than 35 percent in the company’s stock-market debut in Europe’s largest listing of the year to date.
The world’s biggest record label, which represents musicians like Lady Gaga, Taylor Swift and Billie Eilish, traded around $29.32 a share Tuesday morning, which was more than 35 percent above the reference price of $21.70 per share. It closed out the day at $25.10.
The rally gives Universal, which listed on the Euronext Amsterdam stock exchange, a valuation of nearly $55 billion.
In June, the company’s parent, French media group Vivendi, won the backing of shareholders to spin off Universal, which is considered its crown jewel. As a result, 60 percent of Universal’s shares will go to Vivendi shareholders — with Vivendi boss and controlling shareholder Vincent Bolloré nabbing a stake worth roughly $6.9 billion.
Other big winners from the Amsterdam listing include hedge fund billionaire Bill Ackman, whose Pershing Square fund owns a 10 percent stake, and China’s Tencent, which owns a 20 percent stake in Universal.
Universal Chairman and
CEO Lucian Grainge will also get bonuses linked to the listing that, according to Reuters, could add up to as much as $400 million.
Universal, which is the largest music company in the world — dominating rivals Warner Music Group and Sony Music — owns and runs businesses in more than 60 countries.
The label, which boasts of contemporary artists like Ariana Grande and Drake, as well as a back catalog from iconic musicians like The Beatles and Bob Dylan, has a blockbuster portfolio that is attractive to investors.
What’s more, in recent years, the company has focused its strategy on the booming music-streaming sector, which it expects to boost royalty revenue and profits for years to come.
Universal’s road to a booming valuation and a public listing has been a long time coming. In the early aughts, the music industry was embattled by the rise of services like Napster, which allowed consumers to download music for free, causing a sharp decline in CD sales that hampered record labels.