Vivendi Shares Rise on Earnings Beat, UMG Stake Sale Plans

   By Nathan Allen 
 

Shares in Vivendi SA (VIV.FR) rose sharply in early trade Tuesday after the French media group posted better-than-expected earnings, and said that it is looking to sell a stake of up to 50% in Universal Music Group.

First-half earnings before interest, taxes and amortization, or Ebita, was 542 million euros ($633.3 million) up 32% on year and beating consensus by more than 5.6%, according to Bryan Garnier analyst Thomas Coudry. Second-quarter sales of EUR3.35 billion are largely in line with consensus, he said.

The plan to sell up to 50% of UMG is higher than previously suggested and is around 25% more than the market expected, Liberum's Annick Maas said.

Vivendi hasn't yet set a price floor for the stake, but the company said it would use the proceeds for a significant share purchase, a share-capital reduction and bolt-on acquisitions.

"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," Vivendi Chief Executive Arnaud de Puyfontaine said.

At 0803 GMT Vivendi was trading 4.4% higher at EUR22.35, having earlier risen as high as EUR22.50.

The company also disclosed that it has bought French book publisher Editis for EUR900 million. The price, equivalent to 15 times Ebita, is fairly steep but the business will likely be cash generative, Ms. Maas said.

"Publishing businesses generally tend to be viewed as cash cows," Ms. Maas says.

Write to Nathan Allen at [e-mail]

(END) Dow Jones Newswires

July 31, 2018 04:27 ET (08:27 GMT)

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