By Agence France-Presse
French media group Vivendi said Monday it plans to sell up to 50 percent of Universal Music Group as it reported a drop in net earnings.
As revenue dipped 1.4 percent at the music label to 2.6 billion euros ($3.0 billion), Vivendi’s management team told the company’s board of directors that an initial public offering was too complicated and instead recommended a “sale of up to 50 percent of UMG’s share capital to one or more strategic partners, in order to extract the highest value.”
Vivendi said it expected a transaction in the coming months which would be completed by the end of next year.
Vivendi’s net profit slid 6.3 percent in the first half of the year to 165 million euros.
The bottom line was strongly impacted by a write-down of 512 million euros in the value of its investment in Telecom Italia, which it made due its loss of control over the board following a shareholder battle this spring led by the activist hedge fund Elliot Management Corporation.
Vivendi’s sales rose by 18.3 percent to 6.4 billion euros, although without the consolidation of advertising firm Havas and currency effects the gain was 4.0 percent.