Read: 5 reasons musicians like Bob Dylan, Neil Young and Stevie Nicks are selling their song catalogs right now

Vivendi 0IIF, +20.05%, which is controlled by billionaire Vincent Bollore, announced the plan on Saturday after it completed the sale of a 10% stake in UMG to a consortium led by Tencent Holdings 700, -0.53%, which valued UMG at €30 billion ($36.4 billion). The Tencent-led group now owns 20% of the unit.

The transaction, “as well as interests expressed by other investors at potentially higher prices, have now enabled the Management Board to consider a distribution of 60% of UMG’s share capital to Vivendi VIVHY, +0.56% shareholders,” the company said in a statement on Saturday.

It added that Vivendi’s leading institutional shareholders have been pressing for a number of years for a split or the distribution of UMG “to reduce Vivendi’s conglomerate discount.” Following the flotation, Vivendi would own 20% of UMG, which is led by chairman and Chief executive, Sir Lucian Grainge,

Vivendi’s stock rose 16.86% in early European trading on Monday, while shares in Groupe Bollore, which owns a 27% stake in Vivendi, were up 13.30%.

A stock market listing would give UMG more financial power to strike deals and cash in on the boom in the surging popularity of streaming services like Spotify and Apple Music AAPL, +0.18%, as well as social apps like TikTok and Instagram, which license songs to be used in posts by their users.

Read: Warner Music stock gains as profit falls, but revenue rises to top forecasts

Analysts at UBS said that UMG – the world’s biggest music label and publisher – with almost double the revenues of rival Warner Media Group, has consistently delivered share gains in the last 3 years. “Post-split we see significant opportunities to unlock value via asset sales, M&A and capital management,” they added.

Warner Music Group WMG, -0.08% made its own stock market debut on Nasdaq in June last year, raising $1.9 billion, to give the company a market valuation of almost $16 billion.

Read: Neil Young strikes heart of gold with 50% sale of song catalog to publishing house

A string of high-profile artists striking lucrative deals to sell their music rights in recent weeks as songwriter catalogs fetch sale prices 10 to 18 times annual royalties, compared with 8 to 13 times in previous years.

London-listed Hipgnosis Song Fund SONG, +0.42% has been one of the most acquisitive players, announcing deals for rights to music by veteran rock star Neil Young, Fleetwood Mac guitarist Lindsey Buckingham, and record producer Jimmy Iovine this year.

Vivendi said shareholders will be asked to approve the plan to spin out UMG at a meeting on March 29. The company also said it will propose a dividend of €0.60 per share for 2020 at a shareholder meeting scheduled for June.