By Mathieu Rosemain, Toby Sterling and Abhinav Ramnarayan
PARIS/AMSTERDAM (Reuters) -Vincent Bollore is about to personal $7 billion value of Common Music Group shares after it floats subsequent week, elevating questions on how the French tycoon might use this new supply of money as Common’s guardian Vivendi (OTC:) charts a brand new course.
Bollore, the highest investor in Vivendi who spearheaded the spin-off of the world’s greatest music label with artists reminiscent of Girl Gaga and the Rolling Stones, is about to be one of many deal’s greatest winners, the prospectus issued on Tuesday confirmed.
Itemizing Common, with an estimated fairness worth of 33 billion euros ($39 billion), entails distributing 60% of its shares to Vivendi’s shareholders. Bollore is about to obtain about 18%, value about 5.9 billion euros ($7 billion).
“The query subsequent is what he’ll do along with his share,” a supply aware of the transaction mentioned. “The money that he’ll get from this, he might deploy it in another method.”
Common’s itemizing, Europe’s greatest to date this 12 months, drew worldwide consideration after Vivendi offered 20% of the division to a gaggle led by Chinese language tech large Tencent and 10% to U.S. billionaire Invoice Ackman’s Pershing Sq..
Vivendi, now a part of Bollore’s family-run empire, has invested in a spread of corporations, together with media and publishing group Lagardere and Telecom Italia (MI:).
Separating Common from Vivendi will deprive the Paris-based group of its most respected asset and is prone to pushed down the share worth of it guardian after the spin-off.
The media group expects its shares to commerce at a cheaper price after Common’s shares begin buying and selling on Sept. 21 on Euronext’s Amsterdam inventory trade, Common mentioned within the prospectus.
For Bollore and Vivendi, Common’s spin-off goals to extract essentially the most worth from its prized asset as streaming revenues assist the music trade rebound from a downturn.
Common, whose different hit singers embody Justin Bieber and Taylor Swift, sees itself as indispensable for artists in search of to gather royalties in far-flung locations and on social media, an unattainable activity even for main stars, not to mention smaller ones.
Within the 2000s, artists and report labels misplaced gross sales to piracy of digital music and a shrinking marketplace for bodily media reminiscent of CDs. Their fortunes turned within the mid-2010s as subscription providers led by Spotify (NYSE:) helped restore royalty income.
As well as, the explosion of music on ad-supported social media platforms reminiscent of YouTube and TikTok has began to learn report labels as they strike offers for a share of advert income on “user-generated” content material that features music clips.
Common has registered six consecutive years of gross sales progress, reporting 1.49 billion euros in core earnings in 2020 on 7.43 billion euros in gross sales.
($1 = 0.8459 euros)
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