Credit: Shutterstock
The world’s largest music company is reportedly preparing for a massive financial maneuver following a chaotic week of corporate drama. Universal Music Group is currently exploring a potential two part bond sale worth one billion euros, equivalent to roughly one point one five billion US dollars, according to a recent report from Bloomberg.
Industry insiders indicate that the major music corporation is already in discussions with potential investors regarding the offering. The capital raised from the transaction would allegedly be channeled toward refinancing existing company debt alongside general corporate operations. Specifically, the music giant is facing a looming deadline to repay a separate one billion euro bridge loan that matures at the conclusion of July, with another five hundred million euro bond coming due the following year.
The strategic financial play arrives immediately on the heels of a highly publicized boardroom showdown. Universal recently turned down an incredibly ambitious sixty four billion dollar takeover proposal from billionaire investor Bill Ackman and his prominent hedge fund, Pershing Square. The company board officially dismissed the non binding acquisition attempt on the grounds that it materially undervalued the entertainment corporation and failed to promise superior long term value for current shareholders.
Following the public rejection, Ackman completely dissolved his remaining investment stake in the music giant, executing a massive overnight stock placement handled by Bank of America to sell off his remaining shares. Universal subsequently moved to buy back two hundred fifty million euros of its own stock directly from the exiting fund.
The proposed bond offering will be split evenly into two five hundred million euro tranches, featuring maturity timelines of four and ten years respectively. Major financial institutions including Morgan Stanley, BNP Paribas, and Banco Santander are currently attached to manage the upcoming debt issuance. UMG continues to trade publicly on the Euronext Amsterdam exchange.
About the Author
