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Vivendi Considers Sale of 10% Stake in Universal Music to U.S. Investor

PATRICK HERTZOG,JOHN MACDOUGALL/AFP via Getty Images

Vivendi announced on Tuesday it is considering the sale of an additional 10% stake in Universal Music Group to a U.S. investor.

Vivendi, which is planning an initial public offering of the world's biggest label group in Amsterdam by late September, previously sold a 20% stake in it to a consortium led by Chinese online giant Tencent. In the IPO, it will distribute 60%.

"The group is analyzing the opportunity of selling 10 percent of UMG shares to an American investor or initiating a public offering (IPO) of at least 5 percent and up to 10 percent of UMG shares," Vivendi said on Tuesday. "Furthermore, Vivendi will retain 10 percent of the UMG share capital for a minimum period of two years in order to remain associated with the development of its subsidiary" while also "benefiting from the protection of EU legislation applicable to parent companies and subsidiaries from different member states."

If Vivendi success in selling off an additional 10% of UMG, Tencent would be the label’s biggest shareholder at the end of the IPO process with 20%, followed by billionaire investor Vincent Bollore's 16%.

Vivendi also said on Tuesday that UMG would not introduce a so-called "poison pill," a protection against hostile takeover bids, when it becomes a separately listed company. Vivendi also proposed the formation of a new board of directors in which neither "Vivendi nor Group Bolloré intend to be represented."

The company announced recently that shares of UMG will begin trading on the Amsterdam Euronext market "before or by" Sept. 27. Vivendi’s proposal for the UMG share distribution will be put to a vote at the company's shareholders' meeting on June 22.

UMG's first-quarter revenue rose 9.4 percent. That, along with "strict cost control," left earnings interest and taxes up 36 percent.

A version of this article was originally published by The Hollywood Reporter.