Star investor Bill Ackman, through his investment firm Pershing Square, has submitted a non-binding offer to acquire the world’s largest music company, Universal Music Group (UMG). The proposed deal, valued at approximately 55.75 billion Euros, seeks to take control of the conglomerate that boasts a roster of global superstars including Taylor Swift, BTS, and Billie Eilish.
The offer, revealed on Tuesday, values Universal Music at 30.40 Euros per share. This represents a substantial 78 percent premium over its last closing price of 17.10 Euros. Universal Music Group stands as the biggest of the “Big Three” major labels, alongside Sony Music and Warner Music, dominating the global music landscape.
According to Pershing Square, the current plan involves UMG shareholders receiving 5.05 Euros in cash and 0.77 shares of a new entity for each of their existing Universal Music shares. Ackman praised UMG’s management for their exceptional work in cultivating a premier roster of artists. However, he noted that UMG’s stock performance has been underwhelming, attributing this in part to uncertainties surrounding the Bolloré-Group’s 18% stake and a postponed U.S. stock market listing.
Proposed Merger and NYSE Listing
The acquisition strategy involves merging Universal Music Group with Pershing Square SPARC Holdings, a special purpose acquisition company (SPAC). The resulting combined entity, to be named “New UMG,” is intended to be incorporated in the U.S. state of Nevada and listed on the New York Stock Exchange. This strategic maneuver is expected to retire 17 percent of UMG’s outstanding shares while maintaining the company’s investment-grade credit rating.
Pershing Square anticipates that the acquisition process could be finalized by the end of the year, potentially reshaping the ownership and market presence of one of the music industry’s most influential players.
