Saudi Arabian investment fund acquires 5.7% stake in Live Nation

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has purchased a 5.7% stake in global entertainment giant Live Nation.

According to an U.S. Securities and Exchange Commission (SEC) filing, the Saudi fund acquired a total of 12.3 million shares valued at approximately US$500 million, making it Live Nation’s third-largest shareholder.

Liberty Media, which owns a 33% stake, is the largest.

PIF’s stake in Live Nation rose above 5% as of 16th April, according to the filing leading to a rise in Live Nation's share price.

The SEC filing advised that the securities, “were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.”

The PIF sovereign wealth fund is among the largest investment groups in the world with total estimated assets of US$320 billion. It was founded for the purpose of investing funds on behalf of the Government of Saudi Arabia.

The move by PIF is the latest in series of investments in struggling companies that have been either hit hard by the Coronavirus pandemic, including cruise line operator Carnival, or whose shares have been hit by the collapse in crude prices, like European oil companies Royal Dutch Shell and Total. PIF is also reported to have agreed to buy a majority stake in English Premier League football club Newcastle United for £300 million.

Live Nation has been severely impacted by the cessation of live entertainment during Coronavirus shutdowns, with more than 30,000 concerts and summer festivals being cancelled or postponed across the world. The entertainment giant has seen its share price plummet almost 50% since February as its business came to a virtual standstill.

Earlier this month, the company was forced to make cost-reduction plans, including Live Nation Chief Executive Michael Rapino forgoing his US$3 million annual salary.

The live entertainment giant also unveiled a series of financial moves to protect its concert business amid the shutdown, including a new US$120 million credit facility and a ‘cost-reduction program,’ which includes Rapino’s 100% pay cut.