Universal Music Group owner Vivendi climbs as IPO potentially moved to this year

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French giant Vivendi recorded its highest daily jump after announcing it may spin off its Universal Music Group arm by the end of 2021.

Shares climbed 24% earlier on Monday, the biggest one-day gain since it listed in 1989.

The media conglomerate had initially earmarked an IPO for 2023 but said on Saturday the date could be brought forward to this year.

That’s because it completed the sale of a 10% stake to a consortium led by Chinese internet conglomerate Tencent, which now owns 20% of Universal Music.

The label, home to artists such as Taylor Swift and the Beatles, is currently valued at around EUR30bn (GBP25bn).

Its Paris-listed parent is also considering to distribute 60% of Universal Music’s share capital to its own shareholders.

In the third quarter of 2020, the music giant saw revenues jumping 6% to EUR1.8bn thanks to the popularity of streaming platforms.

Recorded music best sellers for the first nine months of 2020 included new releases from The Weeknd, King & Prince, BTS, Justin Bieber and Lil Baby, as well as continued sales from Billie Eilish and Post Malone.

Universal Music will be following the lead of smaller rival Warner Music Group, which last year announced plans to return to the stock market nine years after it was acquired by billionaire Len Blavatnik for US$3.3bn (GBP2.5bn).

The label is home to Ed Sheeran, Cardi B and Bruno Mars and posted a profit of US$256mln (GBP197mln) in 2019.

Shares in Vivendi were trading 19% higher at EUR31.01 at lunchtime.

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