Billionaire investor Bill Ackman’s Pershing Square Capital Management submitted a non-binding takeover proposal to Universal Music Group’s board of directors on April 7, offering to acquire the world’s largest music company in a cash-and-stock deal valued at approximately $64 billion — a 78% premium to UMG’s recent trading price.
The proposal, if completed, would represent one of the largest transactions in the history of the music industry and would move UMG’s primary stock listing from Euronext Amsterdam to the New York Stock Exchange.
Under the terms of the offer, UMG shareholders would receive €5.05 in cash per share — totaling approximately $10.9 billion — plus 0.77 shares of stock in a newly created entity, which Pershing Square is calling New UMG. The combined consideration values each UMG share at approximately €30.40, against a recent closing price of €17.10. The new company would be incorporated in Nevada and listed on the NYSE. Pershing Square said it expects the transaction to close by the end of 2026.
The deal would be structured as a merger between UMG and Pershing Square SPARC Holdings, Ackman’s special purpose acquisition vehicle. Ackman already owns approximately 4.6% of UMG, a stake he first acquired in 2021.
Ackman’s pitch centers on the argument that UMG’s stock has been chronically undervalued not because of any weakness in its underlying business, but because of structural issues tied to its European listing. He argued that a U.S. listing would allow the market to value UMG at roughly 25 times earnings, compared to the approximately 16 times it currently commands in Amsterdam — a rerating he said would unlock substantial value for shareholders.
Beyond the relisting, Ackman outlined a broader value creation plan that includes selling UMG’s stake in Spotify, adjusting the company’s dividend policy, expanding its debt capacity and resolving lingering uncertainty around French conglomerate Bolloré Group’s 18.5% stake in the company — an overhang Pershing Square identified as a key source of investor concern.
In a letter to UMG’s board, Ackman praised chief executive Lucian Grainge and the company’s management, calling out UMG’s artist roster — which includes Taylor Swift, Drake, Kendrick Lamar, Sabrina Carpenter, Lady Gaga and Billie Eilish — and its early moves in artificial intelligence. He said Grainge should remain CEO under the new structure.
As part of the proposal, Ackman called for a board refresh, nominating legendary Hollywood talent agent Michael Ovitz — who represented artists including Madonna and Michael Jackson during his career — as board chairman. Two Pershing Square representatives would also join the board.
Ackman said he and Ovitz had dinner with Grainge several weeks before submitting the offer. “Lucian encouraged us to send it in,” Ackman said.
UMG has not yet publicly responded to the proposal. To succeed, Ackman would need the support of UMG’s two largest shareholders — Bolloré Group, which holds an 18.5% stake, and Vivendi, which owns approximately 13.4%.
By: Montana Newsroom staff
