Vivendi eyes buyers for stake in Universal Music

LOS ANGELES • Vivendi is targeting buyers for a stake in Universal Music Group, even as some private equity investors baulk at the high price and slow pace of the deal, according to sources.

The French company has floated a partial sale or an initial public offering of Universal, the world's largest record group, for years. It said in July last year that it would try to sell as much as 50 per cent of the group.

But Vivendi has not formally hired advisers after multiple pitches and several investors have lost interest, sources said.

The sources added that Vivendi has spoken to firms such as Tencent Holdings about a minority investment, which could help Universal expand internationally, including in China.

But a sale to the Chinese could raise the ire of officials in the United States - the world's biggest music market - amid trade tensions, one source said.

Some have also been dismayed by the minimum value of €25 billion (S$38.5 billion) to €30 billion that Vivendi is seeking. Analysts' estimates for Universal go as high as US$50 billion (S$69 billion).

Universal is home to artists such as Taylor Swift, Kanye West and Drake. It has attracted private equity firms, sovereign wealth funds, and media and technology companies.

But Macquarie Group analyst Giasone Salati said: "Why pre-announce the deal such a long time... instead of just doing so once the deal has been agreed upon?"

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A version of this article appeared in the print edition of The Straits Times on May 24, 2019, with the headline 'Vivendi eyes buyers for stake in Universal Music'. Print Edition | Subscribe