VIVHY Vivendi SE (PK)

-- Vivendi is considering the sale of 10% of its Universal Music stake to an American investor

--A public offering of at least 5% and up to 10% of Universal Music shares is also an option

--Vivendi expects to list Universal Music on Sept. 27 at the latest

By Mauro Orru and Cecilia Butini

Vivendi SE is considering selling a further stake in Universal Music Group--the music giant behind Ariana Grande and Billie Eilish--ahead of its listing in the Netherlands by the end of September.

The French media giant steered by billionaire Vincent Bollore said Tuesday that it is looking to sell 10% of Universal Music to an undisclosed American investor, or alternatively launch a public offering of up to 10% of the record label's shares.

The announcement comes months after a consortium led by Chinese internet company Tencent Holdings Ltd. bought a 10% stake in Universal Music for 3 billion euros ($3.65 billion).

The consortium--which includes Tencent's streaming business, Tencent Music Entertainment Group--currently has a 20% stake in Universal Music, having acquired its first 10% tranche early last year.

Vivendi's latest plan will be seen as a test of the record label's true valuation, which the company two years ago set at EUR30 billion, on which the two stake sales to Tencent were based.

Vivendi hasn't detailed how much a potential buyer would now pay for the same 10% stake, but investors will be eager to see if a higher valuation of Universal Music could rake in more than the EUR3 billion that Tencent paid.

Vivendi currently has an 80% stake in Universal Music and is planning to hand 60% to shareholders in a special distribution, listing the company on the Euronext Amsterdam stock exchange on Sept. 27 at the latest.

Should the company sell another stake, Vivendi will retain 10% in Universal Music for at least two years.

Universal Music's board of directors would mainly consist of nonexecutive members, mostly independent, and Vivendi won't be represented on the board.

The spinoff would come at a comfortable time for the record label, as streaming services have benefited from consumers spending more time listening to music amid the coronavirus pandemic.

First-quarter revenue at Universal Music climbed to EUR1.81 billion from EUR1.77 billion.

New releases from King & Prince and Justin Bieber and sales from the Weeknd, Ariana Grande and Pop Smoke were among recorded music best-sellers for the quarter.

Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94 and Cecilia Butini at cecilia.butini@wsj.com

(END) Dow Jones Newswires

May 18, 2021 05:55 ET (09:55 GMT)

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