Saudi Arabia Investment Fund Acquires $500 Million Stake in Live Nation

Industry Watch | April 28, 2020 | News

Live Nation

The sovereign-wealth fund of Saudi Arabia took a $500 million investment in Live Nation Entertainment Inc. as the world's largest concert promoter risks one or two years without being able to deliver any concerts.

On April 27, 2020, the Saudi Public Investment Fund revealed it had taken a 5.7 percent stake in the firm. Live Nation’s stock, which had halved this year, rose 12% on the news to $42.86. The PIF is now the third-largest shareholder of Live Nation, with Liberty Media being the biggest with a 33 percent stake.

News of the investment reportedly bumped up Live Nation shares to $42.01 from its previous close of $38.24. Live Nation’s stock price has been hit particularly hard this year because of COVID-19’s devastating impact on the live music industry (back in February, before the virus was really spreading in the Untied States, Live Nation shares were valued at over $75).

The investment is estimated at a mere $500 million shy, based on the share prices of Live Nation. Its share price jumped at the news, rising by more than 2 percent in the first few minutes of trading. The investment is passive and was purchased on the open market.

The company has been criticized for being slow to give consumers complete compensation, but it has subsequently revised its refund policy to resolve such concerns. The company has been taking action to bolster its liquidity amid the crisis, including opening a new $120 million revolving credit account, amending an existing credit agreement, and significantly reducing costs, including salary reductions.

The investment in Live Nation is the second by the Saudi government this month in an industry hit hard by the pandemic. The Saudi Public Investment Fund also took a $775 million stake in Carnival Cruises.

Before the pandemic updated international travel, Saudi Arabia tried to boost its tourism industry, and live events and concerts were a major part of that strategy. The K-pop superstars BTS last October became the first foreign band in the country to perform a solo stadium show.

Saudi Arabia’s sovereign-wealth fund took a $500 million stake in Live Nation Entertainment Inc. as the world’s largest concert promoter faces a year or more without being able to stage any events.

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