Billionaire Bill Ackman’s hedge fund, Pershing Square, has offered to buy Universal Music Group (UMG) in a deal that values the world’s biggest music company at about €55bn (£48bn). The cash-and-stock bid would move the label’s stock market listing from Amsterdam to New York.
Ackman said UMG—home to artists including Taylor Swift, Elton John, Adele, and Drake—had suffered from issues “unrelated to the performance of its music business,” including the delay of a US listing and underutilisation of its balance sheet. He blamed uncertainty around French conglomerate Bolloré Group’s 18% stake in the company.
UMG shares had lost more than a quarter of their value in the past year before the offer, which triggered a 13% rise on the Amsterdam Euronext exchange. Pershing controls more than $26bn in assets and already owns a 10% stake in UMG, though Ackman resigned from its board last year.
The proposed deal involves UMG merging with a Pershing Square blank-cheque company and listing on the New York Stock Exchange. Shareholders would receive €9.4bn in cash and 0.77 shares in the new company per Universal share, representing a 78% premium on the closing price last Thursday.
Ackman said he had spoken to French billionaire Vincent Bolloré, the biggest single shareholder, who was “intrigued” by the proposal. The deal would also require UMG to appoint Michael Ovitz as chair and two Pershing Square representatives to the board, plus a new contract for CEO Sir Lucian Grainge, who earned over €41m last year.
