Shares of Universal Music Group jumped by more than a third when it debuted on Tuesday, putting its chairman and chief executive, Sir Lucian Grainge, online for a potential bonus of almost $ 150 million ($ 110 million pounds sterling).
Shares of the world’s largest music company, the label behind artists such as Taylor Swift and Bob Dylan, closed over 35% at € 25.10 on the first trading day, giving the company value. 45 billion euros (38 billion pounds sterling).
Universal’s parent company, Vivendi, had set a benchmark price of € 18.5 per share, a market capitalization of € 33.5 billion, before the launch of its flagship asset on the Euronext Amsterdam stock exchange.
However, investors keen to profit from the streaming boom – analysts at JP Morgan Cazenove described Universal Music as an “extraordinary and must-have asset” – made it the highest European listing of the year.
Grainge, of British origin, is in line for one of the biggest corporate payments in history. Under the terms of the IPO, Grainge will receive a “trade bonus” of $ 90 million, and approximately an additional $ 55 million calculated based on Universal Music’s level of market capitalization above $ 30 billion.
That means the 61-year-old is in line for a bonus potentially greater than $ 140 million, according to Vivendi’s prospectus on the IPO released last week.
Grainge, who received a total of 50 million euros last year, will also receive up to $ 40 million related to the sale of 10% stake in Universal Music to Chinese tech group Tencent and the hedge fund. Pershing Square by Bill Ackman. Grainge also owns 13,187 shares of Universal – his shares in parent company Vivendi have been transferred to the music company. They are worth € 331,000 at Tuesday’s closing price of € 25.10.
Grainge, who was knighted in 2016 and received a star on the Hollywood Walk of Fame last year, nearly died after contracting coronavirus weeks after a lavish party celebrating his 60th birthday in February of the last year.
Vivendi’s decision to separate from Universal, which accounts for around three-quarters of the French conglomerate’s profits, saw its share price drop to 15% at the start of the session. Vincent Bolloré, controlling shareholder of Vivendi, acquired a stake of nearly 6 billion euros in Universal following the IPO.