This post was originally published on this site
Investing.com – Universal Music stock climbed 43% on its first day as a listed company after being spun off by French media giant Vivendi (OTC:VIVHY).
The shares jumped to 26.45 euro (around $31) from their reference price of 18.50 euro on the Euronext Amsterdam stock exchange, giving the company a valuation of around 46 billion euro. This also made it Europe’s largest listing yet this year.
UMG is one of three major labels who control the rights to most of the world’s best-known music acts, with its back catalog boasting iconic artists like Bob Dylan and The Beatles. It’s also behind today’s household names like Lady Gaga, Ariana Grande and Taylor Swift.
The listing follows Vivendi’s (PA:VIV) decision to distribute 60% of UMG shares to shareholders of the parent company.
UMG accounts for around 75% of Vivendi’s profits. Vivendi now owns only a 10% stake in UMG while billionaire William Ackman’s hedge fund Pershing Square also owns around as much. China’s Tencent owns around 20%.
The spin off is a landmark in the recovery of the global music publishing business, which went into a long, piracy-driven decline at the start of the digital age. The rise of the streaming model has now comprehensively reversed that decline.
