Universal Music sounds out investors for one billion euro bond sale

[NETHERLANDS] Universal Music Group is speaking to investors ahead of a possible one billion euro (S$1.5 billion) two-part bond sale on Monday (Jun 8), after rejecting hedge-fund billionaire Bill Ackman’s takeover offer.

The global music entertainment company is rated Baa1 by Moody’s Ratings and BBB+ by S&P Global Ratings.

It is now tapping the bond market to refinance existing debt and fund general corporate activities, a source said, who asked not to be identified.

Universal Music has a one euro billion bridge loan, which was arranged earlier this year, that matures in late July – as well as a 500 million euro bond due in 2027 – data compiled by Bloomberg showed.

The bond offering includes a four and 10-year tranche, each with an expected size of 500 million euros, the source said.

A spokesperson for Universal Music did not respond to queries.

The deal comes after Bill Ackman sold his 1.42 billion-euro stake in the Amsterdam-listed company.

It rejected the hedge-fund billionaire’s bid that would have valued it at about 56 billion euros.

The company said the price “fundamentally and materially undervalues (Universal Music Group)”.

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BNP Paribas and Credit Agricole Corporate & Investment Banking are acting as global coordinators for the bond sale.

Its active bookrunners include IMI Corporate & Investment Banking – part of Intesa Sanpaolo – Mediobanca, Mizuho Financial Group, Morgan Stanley, Banco Santander and Societe Generale. BLOOMBERG