#TheWeeklyRoundUp - 19.02.21

Universal's Amsterdam adventure will leave even slender shareholders of Vivendi loaded (MBW)

Yesterday, MBW broke the news that Vivendi is officially planning to take Universal Music Group public in the Netherlands later this year. Since our story landed, we keep hearing the same question: Why Amsterdam?

Obviously, we’d love to tell you that Sir Lucian Grainge and the Bollorés picked the ‘dam due to a fondness for merrily blazing away sunny afternoons in The Grasshopper, but it’s sadly improbable.

A more feasible, albeit incidental, factor might be Vivendi’s own suggestion that Holland is “a country which has been one of UMG’s historical homes”. (That’s a reference to PolyGram, which wassold to Seagram for $10.6bn in 1998 and then folded into UMG. Vivendi subsequently acquired Seagram in a $34bn all-stock transaction in 2000.)

One reason for Vivendi going Dutch was nailed by the Financial Times last week: Amsterdam’s Euronext recently overtook the London Stock Exchange as Europe’s biggest share trading center, partly due to “the Netherlands scoop up business lost by the UK since Brexit”.

The FT explained that this trend has been propelled by a ban on EU-based financial institutions trading in London “because Brussels has not recognised UK exchanges and trading venues as having the same supervisory status as its own”.

Wherever in the world Universal Music Group goes public, perhaps the most striking initial story to emerge from its IPO will be just how minted it leaves Vivendi’s shareholders.

Vivendi says its management is now evaluating a proposal to spin out 60% of Universal’s equity, a decision it will reach by March 31. UMG’s recently-crowned 20% shareholder, a consortium led by Tencent, has offered an “initial favorable response” to this plan.

Under the proposal, this 60% holding in Universal will be distributed to existing Vivendi shareholders, presumably giving these stock-owners the option of selling their new UMG equity on the Amsterdam Euronext as soon as trading begins.

Exane BNP Paribas estimates this share distribution would see UMG’s post-IPO (but pre-trading) ownership divided up thusly: 20% to Vivendi, 20% to the Tencent consortium, 16% to the Bolloré group (Vivendi’s biggest shareholder), and 44% to other Vivendi shareholders.

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Three trends that will shape the rest of 2021, and beyond (MiDiA)

Late last year, MIDiA published its latest predictions report. The central theme was the Immersive Web, which we summarised as follows: “The immersive web is characterised by environments in which we do not simply conduct extensions of in-real-life activity (e-commerce, video calls) but ones that create behaviours and relationships that only, and can only, exist within these environments. Apps and platforms like Roblox, TikTok and Discord are early iterations of the immersive web, but merely hint at what will come...