If Vivendi sells a chunk of Universal Music Group… who’d buy it?
Big money is back in the music business. On Tuesday (April 25), Vivendi announced to its shareholders that certain investment banks had valued Universal Music Group at an enormous €20bn ( $22bn ). That’s a whopping 31-times multiple on Universal’s last annual EBITDA of €644m ( $700m ). Makes you think: why would someone part with such a gigantic sum to ingest Sir Lucian Grainge’s company? According to Vivendi, that’s not on the cards: the valuation apparently came from banks encouraging Vincent Bollore and co. to float UMG on the stock market. (As if the music industry doesn’t have enough hopeful IPO attempts going on right now…) However, other bankers are reportedly telling Vivendi to sell off 10-15% of Universal to realize a chunk of cash – which the French group could then use to fund acquisitions. At a €20bn valuation, a 15% slice of UMG would set back a potential investor €3bn ( $3.3bn ) – funnily enough, the same price Len Blavatnik paid to buy the whole of Warner Mus...