Universal Music Group NV (UMG), the largest record label globally, engaged in initial talks earlier this year with various private equity firms about a possible take-private transaction, as reported by Bloomberg, referencing sources familiar with the situation.
These sources indicate that UMG’s leadership held discussions with investment companies such as Apollo Global Management, TPG, and Blackstone. Nonetheless, the conversations did not advance, and UMG did not start an official sales procedure.
The music label has a market value of around €29 billion. Its stock has dropped 29% since the start of the year and is now trading below the price at which the firm debuted in 2021. In the private market, music catalogs and other industry assets have significantly higher valuations compared to those for UMG or its rival, Warner Music Group.
In April of this year, Bill Ackman’s investment company, Pershing Square Capital Management, proposed to buy UMG and relocate its stock market listing from Amsterdam to the United States. Universal turned down the proposal; nonetheless, its biggest shareholder, the Bolloré family, concurred with Ackman that the firm is undervalued.
Via its holding company, Bolloré, the Bolloré family manages over 30% of UMG. A further stake exceeding 11% is owned by the Chinese internet powerhouse Tencent.
source: bloomberg.com
