MBW’s Stat Of The Week is a series in which we highlight a data point that deserves the attention of the global music industry. Stat Of the Week is supported by Cinq Music Group, a technology-driven record label, distribution, and rights management company.
We’re less than 24 hours away from Universal Music Group‘s stock market debut in Amsterdam — and now we have an official guide of the company’s valuation at ahead of its highly anticipated public listing.
As first reported by Reuters, a statement published by Euronext today (September 20) indicates that the “technical reference price'” for UMG’s shares is €18.50 (approx. USD $21.70) per share.
This price was communicated to Euronext by UMG’s current parent, Paris-based Vivendi. According to the statement, the price has been reached “upon consultation of the Listing Agent and financial advisors”.
An €18.50 per-share stock market debut would value UMG at nearly €33.5 billion – or approximately $39 billion.
However, the reference price of an about-to-go-public company is merely that: a rough, if official, indication.
We have a useful recent example of how such things can change: Last summer, Warner Music Group set a pre-market price for its IPO on the Nasdaq at $25 per share.
In the end, WMG opened on the stock exchange on June 3 at $27 per share, and closed out its first day at $30.12 per share – some 20.5% higher than its initial set price.
UMG’s parent company Vivendi is preparing to spin off 60% of Universal on the Euronext Amsterdam stock exchange tomorrow (September 21).
Following the Amsterdam listing, ex-Vivendi Chairman Vincent Bolloré (via his companies) will be the second biggest UMG shareholder with 18%.
A Tencent-led Consortium will own 20%, while Vivendi and Pershing Square Holdings Ltd will each own 10% respectively.
In a pre-IPO prospectus published last Tuesday (September 14), UMG noted that “for illustrative purposes”, the recent 10% acquisition of the company by Pershing Square suggests that Universal would carry an approximate market cap of €33 billion on its first trading date.
In addition to revealing details of the company’s business risks, executive rewards, historical financial information and profit forecasts, UMG’s pre-IPO prospectus also revealed details of the firm’s post-IPO board.
The firm’s new board includes Sir Lucian Grainge, who is Chairman & Chief Executive Officer and Executive Director, and Vincent Vallejo, UMG’s Deputy Chief Executive Officer, Corporate and Executive Director.
The board also includes James Mitchell, Senior Executive Vice President and Chief Strategy Officer of Tencent Holdings Limited and a Director of New York Stock Exchange-listed Tencent Music Entertainment Group.
Today’s update follows last months’s news, revealed by Vivendi, that Pershing Square Holdings (PSH), run by billionaire Bill Ackman, will control 10% of UMG’s share capital post-listing.
Prior to the Pershing deal, Vivendi also sold 20% of UMG to a consortium led by China’s Tencent, at a €30 billion company valuation for UMG.
