Universal Music Group is scrapping any plans of going public — and instead, its parent company will begin to pitch a 50 percent stake in the world’s largest music label to possible partners.
The parent, Vivendi, said Monday an IPO in the label — home to Taylor Swift, Jay-Z, Rihanna, Sam Smith and many others — was ruled out due to “complexity.”
The French media firm, which also owns pay-TV network Canal Plus, said it is looking for “one or more strategic partners in order to extract the highest value” from UMG.
Music labels, left for dead a decade ago, have been revived in recent years because of the growth of music streaming.
Chatter over a potential IPO began last August, when Goldman Sachs valued UMG at $23.5 billion. Another moment came soon after, in January, when JPMorgan Cazenove issued a report that asserted if Spotify was worth $20 billion, then UMG was worth more than $40 billion.
UMG’s sale process will likely kick off this fall and could be completed within the next 18 months, Vivendi said — adding that it will soon be engaging banks to help identify strategic partners.
For the first half of 2018, UMG logged revenues of $3.08 billion, up 6.8 percent over the year-ago period. Half-year profits were not disclosed.
The group’s recorded music sector expanded its revenues by 7.4 percent, thanks in part to a 34.3 percent jump in streaming revenues that offset steep declines in download and physical sales.
