Bill Ackman wants to buy the world’s biggest record company for $64 billion, and he put the offer to its board on Tuesday, April 7. Pershing Square’s cash-and-shares proposal prices Universal Music Group at 30.40 euros a share. That is 78 percent above the 17.10 euro close before the news, and it adds up to 55.75 billion euros.
The market liked it. UMG shares, which trade in Amsterdam, finished the day up 13 percent. Bollore Group rose 5 percent and Vivendi gained more than 10 percent.
What Ackman is asking for
Under the plan, Pershing’s SPARC Holdings would merge with UMG. The combined company would become a Nevada corporation listed on the New York Stock Exchange, ending the Amsterdam listing. Pershing has pushed for a New York move for years, arguing it would lift the share price and make the stock easier to trade.
Ackman also laid out a new board. Former Hollywood agent Michael Ovitz, who steered the careers of Madonna and Michael Jackson, would be chair. Two Pershing representatives would join him, though Ackman did not say whether he would be one of them. Lucian Grainge, UMG’s chairman and chief executive, would stay on as CEO.
Ackman said he and Ovitz had dinner with Grainge “a couple of weeks ago” to talk it through. “Lucian encouraged us to send it in,” he said.
Why UMG
The music business is growing. UMG’s stock is not. Its shares have lost almost a third of their value since the IPO, and Wells Fargo analysts pointed to a sliding market share and slower streaming growth. Fears about AI have weighed on the stock too. In March, UMG put off its plans for a US listing.
Ackman’s letter to the board mixed praise for management with criticism of an “underutilized balance sheet” and of how the company handled its 2.7 billion euro ($3.1 billion) investment in Spotify Technology. Analysts and investors told Reuters this is a gentler approach than the activist campaigns that built his reputation. UMG declined to comment to the news agency.
The shareholders who decide
Ackman has been here before. In 2021 his Pershing Square Tontine Holdings, a shell company, targeted UMG, but he dropped the deal under heavy US regulatory scrutiny. Pershing became one of UMG’s biggest investors instead, and Ackman sat on the board until last year. Pershing now holds 4.7 percent, the fourth-largest stake.
The three holders ahead of it matter more. Bollore Group owns 18.5 percent and Vivendi 13.4 percent, and China’s Tencent is also a significant shareholder. The family of French billionaire Vincent Bollore controls 80 percent of UMG’s voting rights.
