The distribution of UMG’s shares to Vivendi’s shareholders in video
Key details from the distribution of 60% of UMG’s share capital to Vivendi’s shareholders
Prior to March 31, 2020, Vivendi owned 100% of Universal Music Group (UMG), the world’s leading music company.
Then, on March 31, 2020, a consortium led by Tencent acquired 10% of UMG’s share capital, followed by an additional 10% on January 29, 2021, crystallizing an enterprise value of €30 billion for UMG.
Having established this valuation, and given that Vivendi’s institutional investors have long been requesting a spin-off or distribution of UMG to reduce the conglomerate discount on the Vivendi share price, the Management Board responded favorably to the investors’ request by considering a special distribution, in shares, of 60% of UMG’s share capital to the Group’s shareholders. UMG will be listed on Euronext Amsterdam.
An Extraordinary General Shareholders’ Meeting was held on March 29, 2021 to vote on the amendment to Vivendi’s bylaws to allow for this distribution in kind, which was approved by 99.98% of the votes cast.
Following that meeting, the Combined Annual General Shareholders’ Meeting was held on June 22, 2021. The shareholders voted on the proposed distribution at this meeting, which was overwhelmingly approved with a 99.9% favorable vote, demonstrating their full support for the proposed strategy. The key details are as follows:
- This distribution, exclusively in kind, would take the form of a special distribution (“special dividend”);
- It would be taxed as a dividend;
- In February, PwC assessed UMG’s equity value at €33 billion. This valuation was confirmed by EY;
- An application would be made to list the UMG shares on Euronext Amsterdam;
- Based on the €33billion valuation of UMG, the distribution ratio[ 1 ] would be one UMG share for one Vivendi share held;
- The listing of the UMG shares would take place no later than September 21, 2021; and
- The governance structure put in place for UMG will be consistent with best practices and rules aimed at the equal treatment of all shareholders.
- The provisional schedule of the operation is as follows:
– September 14: AFM (Dutch Financial Market Authority) approval
– September 21: UMG shares’ first trading day and ex-date of the distribution
– September 22: record date
– Sept. 23: allocation of UMG shares
In addition, on June 20, Pershing Square acquired a 10% stake in UMG for $3.949 billion. The price is based on an enterprise value of €35 billion for 100% of UMG.
Vivendi will retain a 10% stake in UMG for a minimum of two years to remain associated with the development of its subsidiary while benefiting from the protection of European legislation applicable to parent companies and subsidiaries of different Member States.
[ 1 ] For full details on the ratio, see the Report on the special dividend in kind and on the special interim dividend in kind available on Vivendi’s website.