Universal Music Group shares surge on stock market debut (updated)

Pershing Square Holdings

21/09/2021 08:15

(Adds details, share price update)
    AMSTERDAM, Sept 21 (Reuters) - Universal Music Group's
shares  UMG.AS  surged at the start of trading on Tuesday, as
owner Vivendi  VIV.PA  spun off the record label in the biggest
European listing of the year.  urn:newsml:reuters.com:*:nL1N2QM1FH
    The spin off hands 60% of Universal shares to Vivendi
shareholders, while U.S. hedge fund billionaire William Ackman
and China's Tencent  0700.HK  due to retain large slice
alongside Vivendi's 10%. 
    Universal Music Group (UMG) was trading at 25.61 euros by
0710 GMT, up by around 38% compared to its reference price of
18.50 euros, giving the world's biggest music label a market
value of over 46 billion euros($54 billion).     
    UMG is betting that a boom in streaming led by Spotify
 SPOT.N  that has fuelled royalty revenue and profit growth for
several years still has a long way to run, in a music industry
it dominates along with Warner  WMG.O  and Sony Music  6758.T . 
  
    The business behind singers such as Lady Gaga and Taylor
Swift is betting that a boom in streaming that has fuelled
revenues and profits still has a long way to run, in an industry
it dominates along with Warner  WMG.O  and Sony Music.     
    Universal, whose other hit singers include Justin Bieber and
Taylor Swift, hopes to build on deals with ad-supported sites
such as TikTok and YouTube as well as streaming services such as
Spotify. 
    Part of its business derives from the rights attached to its
hefty catalog, and it also collects royalties for the artists it
represents across social media platforms and in far-flung
places. 
    The COVID-19 pandemic hit live concerts and Universal's
merchandising business, but ad-supported revenues have picked up
after a blip. 
    Its flotation carries high stakes for Canal+ owner Vivendi,
which hopes in the longer run to rid itself of a conglomerate
discount which it believes has weighed on its shares.($1 =
0.8522 euros)

 (Reporting by Toby Sterling, Sudip Kar-Gupta; Writing by Ingrid
Melander; Editing by Sarah White)
 ((sudip.kargupta@thomsonreuters.com; +33 1 49 49 53 84;))