Universal Music discussed buyout options with private equity giants - Bloomberg

Universal Music Group NV (AS:UMG) held preliminary talks earlier this year with several prominent private equity firms about taking the music giant private, Bloomberg reported, citing people familiar with the matter. Management explored potential options with buyout heavyweights including Apollo Global Management Inc., Blackstone Inc., and TPG Inc. with the board's knowledge, though the discussions did not advance and the Amsterdam-listed company has not initiated a formal sales process.

The exploratory talks highlight growing internal and market frustration over Universal’s equity valuation, which has slipped roughly 29% this year to trade below its 2021 initial public offering level. That persistent slump has widened the disconnect between public market multiples and the premium valuations commanded by music catalogs and intellectual property in private transactions, even as Universal represented nine of the ten best-selling global acts last year.

Any path toward a transaction would require the backing of the billionaire Bolloré family, which controls more than 30% of Universal between Vivendi SE and family holdings. Cyrille Bolloré told shareholders in May that the stock is materially undervalued and ruled out selling too early, and neither the Bolloré group nor Tencent Holdings Ltd., which retains an 11% stake, has expressed interest in divesting their broader positions.

The valuation dispute also follows a failed takeover push earlier this year by prominent shareholder Bill Ackman, who proposed acquiring the company and relocating its listing to the United States. While Universal’s board rebuffed that effort, the bid crystallized broader investor unease over public market headwinds, including slowing streaming growth across mature Western markets and market-share gains by independent distributors offering flexible terms.

Simultaneously, traditional record labels are grappling with mounting investor anxiety surrounding artificial intelligence and the sheer volume of synthetic music flooding major streaming platforms. While Chief Executive Officer Lucian Grainge addressed these dilution concerns in July by stating Universal anticipated the influx of unauthorized uploads and fraud, Wall Street remains cautious about potential royalty erosion across the broader recorded-music ecosystem.