Pershing Square's Bill Ackman Pursues $64 Billion Merger Deal with Universal Music Group

Pershing Square Offers to Buy Universal Music Group in $64 Billion Deal

On Tuesday, Pershing Square, the investment vehicle of billionaire Bill Ackman, offered to acquire Universal Music Group (UMG) in a deal valued at $64.31 billion. The proposed acquisition would move UMG's listing from Amsterdam to New York, with the goal of reviving the company's value.

According to Reuters calculations, Pershing Square's cash-and-shares offer values UMG at around 30.40 euros per share, a 78% premium to the company's last closing price of 17.10 euros. The deal would be worth 55.75 billion euros, making it one of the largest music industry deals in history.

UMG, the company behind international superstars such as Taylor Swift, Billie Eilish, and Kendrick Lamar, has declined to comment on the proposed deal. Analysts at ING have stated that the offer is non-binding and may fail, but it raises valid questions and makes a strong case for dramatic changes within the company.

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Shares in UMG were up 10% on Tuesday, while top shareholder Bollore Group climbed 5%. Shares in Vivendi, UMG's second-biggest shareholder, also saw a significant increase of over 10%.

Table: UMG Share Price Comparison

Pershing Square has a long history of advocating for a New York listing for UMG, citing its potential to boost the company's share price and liquidity. The investment vehicle has repeatedly pressed UMG's management to pursue this goal, but the company has delayed its plans due to market conditions.

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Under the proposed deal, Pershing Square's SPARC Holdings would merge with UMG, creating a new entity listed on the New York Stock Exchange. Renowned Hollywood talent agent Michael Ovitz would join the board as chairman, along with two Pershing representatives.

The deal would require approval from UMG and SPARC boards, a two-thirds vote in favor by UMG shareholders, and required regulatory approvals. Pershing Square has stated that it expects the transaction to close by the end of the year.

Analysts have noted that Ackman would need to launch a "full-on charm offensive" to win over major shareholders such as China's Tencent and French billionaire Vincent Bollore, who owns 18.5% of UMG.