Vivendi plans to sell another 10% of Universal Music Group

By Emmanuel Legrand

French media and entertainment group Vivendi said it is preparing to sell an additional 10% of the 80% shares in Universal Music Group before floating 60% of UMG's shares on Amsterdam's Euronext by September 27. 

  Considering that it sold 20% of UMG's business to a consortium led by China's Tencent for €6 billion, the transaction could net Vivendi another €3bn.

  “The group is analysing the opportunity of selling 10% of UMG shares to an American investor or initiating a public offering (IPO) of at least 5% and up to 10% of UMG shares,” Vivendi said in a statement. If the 10% transaction goes through, Vivendi will be left with 10% of UMG shares, with Tencent owning 20% and the Group Bolloré, which controls Vivendi, with 16%.

No poison pill mechanism 

  “Vivendi will retain 10% of the UMG share capital for a minimum period of two years in order to remain associated with the development of its subsidiary while benefiting from the protection of EU legislation applicable to parent companies and subsidiaries from different Member States," said the company. 

  Vivendi will also propose the setting up of a governance structure for UMG with a Board of Directors comprised primarily of non-executive members, a majority of whom will be independent. Neither Vivendi nor Group Bolloré "intend to be represented on the Board at this stage." 

  It added: "The principle of 'one share, one vote' will be fully observed as no preferred shares nor any other multiple voting rights will be exercised; No poison pill mechanism will be put in place; Board members’ term of office will be limited to two business years."