Ackman Submits UMG Takeover Bid
• Billionaire hedge fund manager Bill Ackman‘s Pershing Square Capital Management has submitted an offer to buy Universal Music Group in a cash-and-stock transaction valued at approximately $64 billion. The takeover bid was submitted to UMG’s board early Tuesday.
As AP News notes, “The proposed deal would involve Universal Music merging with Pershing Square SPARC Holdings, an acquisition company approved by the Securities and Exchange Commission in 2023. Plans would include the new company being based in Nevada and moving its stock listing from Euronext Amsterdam to the New York Stock Exchange.”
Ackman claims UMG’s stock has been undervalued because of uncertainty around its ownership structure and around UMG’s stake in Spotify, and by the company’s delay of its planned stock listing in the U.S. In a statement, Ackman noted, “Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance. However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.”
• In response to Pershing Square’s offer, UMG issued this brief statement: “Universal Music Group N.V. today confirmed that its Board of Directors received an unsolicited and non-binding proposal from Pershing Square Capital Management, L.P.
The Board of Directors, together with its advisors, will review the proposal in accordance with its fiduciary duties and analyze its implications for shareholders, employees, artists, songwriters and other stakeholders.
The Board of Directors has complete confidence in UMG’s strategy and the leadership of Sir Lucian Grainge and the Company’s management team. UMG will have no further comment on the proposal until the Board of Directors completes its review.”
CNBC notes that UMG shares gained about 11% Tuesday (19.06) in Amsterdam.
