Tencent to lead consortium for Universal Music Group stake

Business | 18 Nov 2019 11:39 am

Tencent Holdings (0700) is in talks with potential co-investors for its proposed bid for a minority stake in Universal Music Group from Vivendi SA, according to people with knowledge of the matter, Bloomberg reports.

Hillhouse Capital and Singapore’s sovereign wealth fund GIC Pte are among potential investors that the Chinese company has approached, the people said.

Tencent plans to lead the consortium for the 10 percent stake in UMG with a goal to carry out the purchase within the next few months, the people said.

Tencent is weighing to raise about 1 billion euros in debt to help fund the deal, while the rest will likely be funded in equity, the people said.

Vivendi said in August that it is in talks to sell 10 percent of UMG to Tencent in a deal that values the world’s biggest music company at 30 billion euros. The Chinese tech firm has a one-year call option to acquire an additional 10 percent at the same price and terms.

Vivendi also plans to sell an additional minority stake in UMG to other potential partners. Enlisting minority investors would help Tencent share the costs and risks of buying 20 percent of UMG, the people said. No final decision has been made as talks are still ongoing and could fall apart, the people said.

A representative for Tencent didn’t respond to requests for comment, while representatives for Hillhouse, GIC and Vivendi declined to comment.

Shares of Tencent added 2.1 percent in Hong Kong morning trading.


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