Liberty Media Is ‘Absolutely’ Interested in Acquiring a UMG Stake

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Universal Music Group HQ in Santa Monica, CA

If and when Vivendi offers up a part of Universal Music Group, Liberty Media ‘absolutely’ wants in.

Several months ago, Liberty Media finally achieved what owner John Malone had long aimed for.

After years of negotiations and purchasing a minority stake, SiriusXM acquired Pandora Media.  Set at $3.5 billion, Liberty Media paid $10.14 a share in an all-stock transaction, much lower than the $15 a share deal Malone had previously offered former CEO Tim Westergren.

Pointing to the company’s long-term strategy of creating “synergy” between SiriusXM and Pandora, the Liberty’s CEO, Greg Maffei, explained that the move would create “the world’s largest audio-entertainment company.”

But, John Malone and Greg Maffei aren’t stopping there.  Now, Liberty Media wants a considerable slice of one of the world’s biggest record labels.

Buying a piece of UMG.

Greg Maffei has confirmed he would “absolutely” consider purchasing a stake in Universal Music Group (UMG).

Speaking at an investor conference in New York, Maffei explained that an investment in UMG would make logical sense.

Would we look at UMG if presented?  Absolutely.  Does it make potentially some sense to own part of the content infrastructure as a way to hedge?  Absolutely.

Vivendi had long floated the idea of launching a behemoth Wall Street public offering for UMG.

Over the summer, the company hinted it could reach a $40 billion valuation should it go public.  The major label continues to post record-breaking numbers during every financial quarter, including a monstrous surge in streaming revenue.  Launching an IPO, the French conglomerate posited then, would make perfect business sense.

Vivendi ultimately discarded that idea in July, choosing instead to sell up to 50% of the company.  Arnaud de Puyfontaine, Vivendi’s Chief Executive, explained the IPO idea proved “too complex.”

Our goal is to determine a list of potential partners that would help us to obtain the best valuation for Universal while accelerating its growth.”

Several names immediately emerged.  Could Spotify potentially partner with the major label in a costly transaction?  The move could give the struggling streaming music giant a viable source of profitable income.  It could also solve a number of nagging licensing problems.

Yet, it’s unknown when Vivendi will finally offer a stake in Universal Music Group.

One thing remains clear with Maffei’s confirmation.  Once UMG goes ‘on sale,’ expect to have multiple suitors with sizable wallets lining up to buy a stake.


Featured image by coolcaesar (CC by 3.0).