Taylor Swift Pays Off for Universal Music Owner Vivendi
(Bloomberg) -- Fans streaming the latest hits from Taylor Swift and Post Malone propelled sales growth at Universal Music Group as its French parent company Vivendi SA tries to secure new investors in the business.
- The strong showing by the world’s biggest music group underpinned a better than expected 7.2% increase in Vivendi’s third-quarter organic revenue to 3.97 billion euros ($4.41 billion), according to a statement Thursday. Analysts had expected 3.85 billion euros.
- Vivendi said due diligence and the finalizing of legal documents on the sale of 10% of Universal Music to Tencent Holdings Ltd. “should be completed in the coming weeks.”
- Vivendi sees no problem “at this stage” if U.S. authorities were to review the sale, CEO Arnaud de Puyfontaine said during a call with analysts Thursday.
- The music unit’s performance could help smooth the stake sale to Tencent, the biggest social media company in China, where music streaming has begun to take off.
- The discussions with Tencent value Universal Music at 30 billion euros. Vivendi said Thursday other potential partners had expressed an interest in investing in Universal Music “at a similar price level.”
- Music industry sales continue to recover from the decline of the CD thanks to the surging popularity of subscription streaming. The growth at Universal Music builds on an already strong year-earlier quarter buoyed by releases from Drake and Eminem.
- Shares in the Paris-based media conglomerate controlled by billionaire Vincent Bollore rose 2% at 9:07 a.m., and are up 21% this year as Universal Music’s runaway success swells the potential stake sale proceeds.
- Vivendi pay-television unit Canal+ Group, which is being heavily challenged by Netflix Inc., saw revenue fall 0.9% in the quarter. More competition is on its way with the upcoming arrival of streaming services from Walt Disney Co. and Apple Inc.
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