Investing.com - By tradition, the largest financial remuneration is obtained by those who develop rapidly. The Vivendi office in Universal Music Group, in whose state includes artists since Ariana Grande and Billy Eilish and ending Andrea Bocelley, may be an exception that only confirming the rule.
The French Conglomerate delayed the sale process by more than three years, during this period the worldwide recognition of streaming broadcasting as a preferred means for music lovers led to real business transformation and UMG prospects.
And now he is well paid for delay.
Despite the fact that this process lasts, it seems eternity, news published in the past weekend, they were still able to push the Vivendi shares on Monday to a sharp growth on the stock exchange in Paris. Fighting resistance for several weeks near his dagedm maximum, to noon today, stocks rose more than 16% to a new record maximum in Europe.
Vivendi plans to distribute 60% of UMG shares among their shareholders in the form of special dividends by the end of the year. This step is aimed at giving shareholders to the maximum benefit while reducing their tax liabilities on capital gains.
The company's assessment is at least 30 billion euros ($ 36 billion), which roughly corresponds to the price received from the Tencent Music Entertainment Group (NYSE: TME) for two consecutive 10% stakes. The second of these sales fell for December last year, as a result of which the share of the Chinese company increased to 20%.
It is curious that in his Saturday statement the company referred to "Interests expressed by other investors in potentially higher prices." It does not seem impossible, considering that its competitor - Warner Music (Nasdaq: WMG), which accounts for a little more than half of the UMG revenue, is estimated at $ 15.9 billion.
Receipts from the sale of Tencent, plus a higher cost of the remaining share in UMG, allow Vivendi to continue the ransom of the shares, which she has long promised. She also spoke again about new acquisitions, although the details in the Saturday press release is not given.
What remains of Vivendi after redemption is likely to be little interesting for non-French investors: an estimate of 30 billion euros, laid down in the cost of UMG, amounted to almost 90% of the Conglomerate value at the time of the closing of the exchange on Friday, although it accounted for only 45 % of total sale. Despite the signs of progress in the Canal + TV unit, nor it nor the Havas communications company bring the same income.
The newly registered company will be listed on the Amsterdam Stock Exchange, which, according to Financial Times, last week, was the main beneficiary of European investors, withdrawing their cash from London after completing the Brexit transition period.
Author Jeffrey Smith
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