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Europe Markets: Possible Universal Music sale pushes Vivendi shares higher, as European stocks march into record territory

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French media giant Vivendi said on Tuesday that it may sell an additional 10% of Universal Music — the label behind acts including Lady Gaga, Justin Bieber, Taylor Swift, and Kendrick Lamar — ahead of floating the group by the end of September 2021.

Vivendi
VIV,
+1.96%

stock climbed 2% higher in Paris, after the company said it was “analyzing the opportunity of selling 10% of [Universal Music Group] shares to an American investor or initiating a public offering of at least 5% and up to 10% of UMG shares.”

A consortium including Chinese technology giant Tencent
700,
+1.17%

already owns 20% of Universal Music after the sale of two 10% stakes, while Vivendi retains 80% ownership. The French group confirmed plans last week to list Universal Music in Amsterdam this fall, in a move that would distribute 60% of its share capital to current investors.

As the music industry enjoys strong revenue growth from streaming services, Vivendi is set to profit from a listing, and it values Universal Music at €33 billion ($40 billion).

Also read: ‘Big Short’ investor Michael Burry makes bearish bet on Tesla

In wider trading, the pan-European Stoxx 600
SXXP,
+0.40%

rose 0.4%, nearing the record high hit last week. In London, the FTSE 100
UKX,
+0.39%

climbed 0.4%, while Paris’ CAC 40
PX1,
+0.26%

was 0.3% higher and the Frankfurt DAX
DAX,
+0.34%

ticked up 0.4%.

Dow futures
YM00,
+0.25%

were pointing up around 90 points, set for a positive open after declining 54 points on Monday to close at 34,327.

Stocks continue to rebound from declines last week driven by U.S. inflation fears, with analysts pointing to a return by investors to tech stocks, which were particularly battered in the selloff.

“The markets continue to find support from optimism surrounding the reopening of major economies and ongoing backing from major central banks,” said Victor Argonov, an analyst at fintech investment group Exante. “Investors still appear keen to buy every dip in stocks and sell the dollar in favor of risk-sensitive commodity dollars and British pound.”

“Investor sentiment remains cautiously optimistic, with concerns about sky-high valuations for many U.S. technology stocks and runaway inflation subsiding a little,” Argonov added.

Plus: Amazon reportedly in talks to buy MGM, the movie studio behind James Bond

Shares in Vodafone
VOD,
-6.15%

sunk 6.5%, after the telecommunications giant missed analyst expectations for full-year earnings, despite returning to profit to the tune of €536 million in the 12 months to the end of March, following a €455 million loss in the year prior.

Imperial Brands
IMB,
+1.64%

stock rose 1.5%, after the tobacco group reported a solid first half of its fiscal year and said it was on track to deliver its full-year targets. Revenue rose 6% to £15.5 billion in the six months to the end of March, driven by strong growth in next-generation products like vaping — which have previously faced headwinds.

Shares in Stellantis
STLA,
+1.50%
,
the world’s fourth-largest car maker, formed out of the merger between Fiat Chrysler and PSA Group earlier this year, rose 1.5%. Later on Tuesday, the group and Foxconn — the assembler of Apple’s
AAPL,
-0.93%

iPhone — are set to announce a new partnership.

Trading in Siemens Gamesa
SGRE,
-2.12%

stock was halted by Spanish regulators, after local newspaper Expansión reported that Siemens Energy — which owns a 67% stake in the wind turbine manufacturer — has hired investment banks to increase its ownership. Shares in Siemens Energy
ENR,
+3.87%
,
the energy tech spinoff of German industrial giant Siemens, rose 2.5%. Siemens
SIE,
-1.00%

stock fell 1%.

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