(Bloomberg) -- A drastic dip in Universal Music Group NV’s share price on Thursday was an “overreaction” to its disappointing results, according to its major shareholder, Vivendi SE.
“Vivendi suffered the consequences of the market’s overreaction to UMG’s earnings,” Vivendi Chief Executive Officer Arnaud de Puyfontaine said on a call with reporters after the market closed. “The fundamentals of UMG are good and we remain serene as a shareholder,” he added.
Universal, the world’s largest record label, saw its biggest share decline on Thursday since being spun off by Vivendi in 2021. Shares fell as much as 30% after its streaming and subscription revenue disappointed investors.
The French media conglomerate’s share price also declined, falling about 6% to close at €10.10 in Paris on Thursday.
The CEO’s remarks came as Vivendi posted its financials for the second quarter. Sales reached €4.78 billion ($5.2 billion) for the period, the company said in a statement Thursday. Its biggest unit, pay-TV group Canal+, saw revenue rise to €1.55 billion.
French billionaire Vincent Bolloré is planning to break up his sprawling media and entertainment group after building an empire that spans broadcast, cinema, publishing, music and gaming. The plan marks a shift away from France as the mogul pushes to internationalize his media assets.
On Monday, Vivendi laid out a plan to list its Canal+ broadcasting business on the London Stock Exchange and said advertising agency Havas will likely trade in Amsterdam.
A decision could be made at the end of October and voted on by shareholders in December, Vivendi said. The split needs investors holding at least two-thirds of Vivendi’s shares to approve the deal before it goes ahead.
The plans come as Vivendi faces increasing regulatory pressure in its home market. The French media regulator announced on Wednesday that Canal+ would not see its free-to-air license for French TV channel C8 renewed.
The decision follows multiple fines regarding the content of its shows, including for spreading conspiracy theories.
“We are shocked and sad, we will see what tomorrow brings,” Vivendi’s CEO told reporters.
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