Vivendi Enters Talks With Tencent to Sell Stake In Universal Music Group

Vivendi said the company plans to pursue the sale of additional minority stakes in UMG to other potential partners, which is consistent with previous announcements.

The French group's sharerprice rose by as much as 9.1 percent following the announcement.

While the sale of a stake in UMG doesn’t come out of the blue, the timing does come as a surprise.? ?Vivendi announced its intent to sell half of UMG's share capital on July 30 of last year, which coincided with management's decision to bail on plans to take the label group public.

The media giant was known to be engaged in talks with potential suitors, specifically Liberty Media and Tencent.

In an interview published six weeks ago in Bloomberg, Vivendi chairman Yannick Bolloré gave an update on moves to sell up to half of UMG by indicating that "everything's fine" and that the “process is still on track." That read like shorthand for, “it’s going well but don’t expect any action this year.”

With Tuesday's notification, the process appears to be moving faster than anticipated, though any arrangement will require regulatory approval. 

Thanks to the rise of streaming and subscription services, UMG is enjoying strong returns, with some analysts valuing the company at up to $45 billion.

First-half revenues at the music giant were up 18.4 percent, to $3.7 billion, Vivendi reported last month, contributing to a revenue spike at the entertainment conglomerate of nearly 14 percent, to $8.1 billion.