Bill Ackman Proposes Buying Universal Music Group for €56 Billion

Pershing Square has submitted a non-binding proposal to acquire Universal Music Group in a cash-and-stock deal valuing the music label at €30.40 per share, a 78% premium to its last closing price. Bill Ackman contends that UMG has been undervalued due to structural issues unrelated to its business performance, such as the Bolloré Group’s 18% stake and the postponed U.S. listing. The proposal involves UMG shareholders receiving €5.05 per share in cash and 0.77 shares of a new entity, New UMG, per share held. The merger with Pershing Square SPARC Holdings would list on the NYSE, potentially enabling S&P 500 inclusion. Pershing Square, supporting the equity financing, anticipates deal closure by 2026. Ackman acknowledges the effective management under CEO Sir Lucian Grainge, yet highlights that external factors have affected stock performance. His cited issues include uncertainty over Bolloré’s stake, postponed listing, balance sheet underutilization, and lack of a clear capital allocation plan. Pershing Square has been involved with UMG since acquiring a 10% stake in 2021 from Vivendi. Legal advisors for the transaction include Sullivan & Cromwell, White & Case, and Stibbe, with Jefferies as financial advisor. The proposal remains non-binding with no public response from UMG’s board.