Bill Ackman’s Pershing Square Capital Management has put forth an offer to acquire Universal Music Group (UMG)—the music powerhouse behind artists like Lady Gaga, Kendrick Lamar, and Sabrina Carpenter, among others.
This proposal arrived accompanied by a “value creation plan,” according to a statement released by the fund of which Ackman also serves as CEO. The intricate transaction is anticipated to finalize before the year’s end, the firm noted.
UMG’s stock price has been “stagnated by a confluence of factors unrelated to the music business’s performance and, critically, all of which this transaction resolves,” Ackman’s release asserted.
As per the proposal, Universal Music—the planet’s foremost recorded music entity—would merge with Pershing Square SPARC Holdings, a specific type of acquisition vehicle.
The resulting entity would be listed on the New York Stock Exchange, effectively transferring Universal Music’s public listing from Europe to the United States.
Ackman has attempted a similar maneuver previously. In 2021, he established a SPAC to target Universal Music when it was still owned by Vivendi. Although he managed to secure a 10% stake, he ultimately failed to purchase the entire company. Ackman subsequently resigned from UMG’s board last year.
The record label, which also features Billie Eilish, Ariana Grande, and Florence + The Machine in its roster, is currently traded in Amsterdam, even though its operational headquarters are situated in Santa Monica, California.
Shareholders are set to receive a total of €9.4 billion ($10.9 billion) in cash—translating to €5.05 per share—and, in exchange for every UMG share they hold, they would receive 0.77 shares in the new company.
This announcement propelled Universal Music’s shares upward by over 18% at the opening bell. By midday trading in Amsterdam, the stock was trading 11.3% higher for the day, reaching €19.04.
In a letter addressed to the Universal Music board, dated Tuesday, Ackman characterized the company as “high-quality” and “capital-light,” highlighting the “long-term growth of global music, where streaming penetration and corresponding pricing power support sustained, high-single-digit revenue growth for the next decade and likely beyond.”
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