Friday, 18 August 2017

Goldman sells Spotify shares even as bank tunes into $13bn float

A multibillion dollar Goldman Sachs hedge fund has quietly sold shares in Spotify even as the Wall Street bank helps the digital music service prepare for an eye-catching public listing in New York.

Sky News has learnt that Goldman Sachs Investment Partners (GSIP) has sold more than $75m of Spotify shares in recent weeks amid demand from other shareholders.

The shares offloaded by GSIP, which manages money on behalf of institutional clients, represent "less than half" of its stake in the Swedish-based company, according to a person close to the transactions.

Insiders said that three GSIP entities - Global Private Opportunity Partners II LP, Global Private Opportunity Partners II Offshore Holdings LP and ODM Investors LP - had collectively sold more than 24,000 Spotify shares at a price of $3100 each.

The aggregate proceeds totalled just over $75m, they added.

Filings suggest that all Goldman entities may have held just over 50,000 Spotify shares at the end of last year, although an insider said the Wall Street bank's overall shareholding split across different entities was actually three times that level prior to the recent sale.

The trades are likely to attract attention because of Goldman's role in helping Spotify finance itself as a private company in recent years, and in preparing it to go public with a valuation of well over $10bn.

GSIP is understood to have been a long-term shareholder in Spotify, and one source said the hedge fund had "practical reasons to sell a small stake".

It was unclear, however, why the disposals were necessary prior to the listing of shares in the music company.

An active private market exists for Spotify stock, and shares have changed hands in recent months at ever-higher valuations.

A person close to the company said the latest price for the shares was about $3400.

Under Spotify's articles of association, shares must be offered to existing investors before being sold to a third party.

Reports have suggested that a flotation will put a price tag of at least $13bn on the music-streaming service.

Alongside Allen & Co and Morgan Stanley, Goldman is working with Spotify on its flotation plans, which are likely to avoid the usual route that companies take when listing their shares publicly.
An alternative route known as a direct listing would involve listing Spotify's existing equity rather than selling new shares.

SKY      News.