Bill Ackman's Pershing Square has proposed a $64.31 billion (€55.75 billion) takeover of Universal Music Group (UMG), the world's largest music label. The non-binding offer, announced on Tuesday, values UMG at approximately €30.40 per share, representing a 78% premium over its last closing price of €17.10. The deal would merge UMG with Pershing Square's SPARC Holdings, creating a new entity to be listed on the New York Stock Exchange.
Core Facts and Immediate Action
Pershing Square's proposal includes €9.4 billion in cash and 0.77 shares in the new company for each UMG share. UMG shareholders would receive €5.05 per share in cash and additional shares. The deal aims to address UMG's "languishing" stock price since its 2021 listing, which Ackman attributes to uncertainty over Bolloré Group's 18% stake, delayed U.S. listing plans, and underutilization of UMG's balance sheet. UMG shares surged around 13% in early trading on Tuesday, while Bolloré Group's shares rose 6%.
Deeper Dive and Context
Artist Roster and Business Performance
UMG represents a vast roster of artists, including Taylor Swift, Billie Eilish, Drake, The Beatles, Queen, and Adele. The company operates iconic Abbey Road Studios and labels such as EMI and Island Records. Ackman praised UMG's management for "excellent" business performance but argued that external factors have depressed its stock value.
New York Listing and Leadership Changes
The proposed merger would list the new entity on the NYSE, a move Pershing Square argues would boost liquidity and share value. Former Walt Disney Company president Michael Ovitz would join UMG's board as chairman under the deal. Pershing Square hopes to close the transaction by the end of 2026.
Market Reaction and Stakeholder Responses
UMG has not yet responded to the offer. Pershing Square, which already holds a stake in UMG, also owns investments in Google, Meta, Amazon, and Restaurant Brands International. The proposed deal follows UMG's delayed U.S. listing plans last month, which Pershing Square had previously requested.
Financial and Strategic Implications
The takeover would create one of the largest entertainment companies globally, with a combined market value of over $64 billion. Pershing Square's cash-and-shares offer is designed to provide immediate liquidity to UMG shareholders while positioning the new entity for long-term growth in the U.S. market.