By Jonathan Easton
Vivendi has sold a small stake in Universal Music Group for over US$1 billion.
The French media group, which owns broadcaster Canal+, confirmed the sale of a 2.9 per cent stake to American hedge fund manager Bill Ackman’s Pershing Square.
The US$1.149 billion sale is based on an enterprise value of US$41.40 billion for Universal Music Group.
This is the second sale of a stake in the music group to Pershing Square, and comes after the company bought a 7.1 per cent stake from Vivendi earlier in August.
The transaction is set to close by September 9, and comes ahead of the distribution of 60% of UMG’s share capital to Vivendi shareholders scheduled for September 21.
In January, Vivendi sold a 10 per cent stake in UMG to Chinese giant Tencent, bringing the company’s total holding in the music publisher to 20 per cent.
Vivendi has said that it plans to use the funds generated from the UMG deals to reduce its debts and finance share buybacks.
