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Bill Ackman’s Pershing Square offered to buy Universal Music Group yesterday in a $64 billion deal via its acquisition vehicle that would move the world’s biggest music label’s listing to New York in a bid to revive its value.
Pershing Square’s cash-and-shares offer values Universal Music at around 30.40 euros per share - a 78 per cent premium to the last closing price of 17.10 euros – making the deal worth 55.75 billion euros ($64.31 billion), according to Reuters calculations.
Universal Music Group – the company behind international superstars, including Taylor Swift, Billie Eilish and Kendrick Lamar, declined a Reuters request for comment on the proposed deal.
“The offer is non-binding and might well fail but we think at a minimum it has the merit of raising valid questions and making the case for dramatic changes,” said analysts at ING, adding that they expected investors to carefully consider the proposal.
Shares in the entertainment company, which is listed in Amsterdam, were up 10pc yesterday, while top shareholder Bollore Group climbed 5pc. Shares in Vivendi, UMG’s second-biggest shareholder, were up over 10pc.
Pershing bought a 10pc stake in UMG from Vivendi ahead of its 2021 Amsterdam IPO and has since repeatedly pressed for a New York listing, arguing it would boost UMG’s share price and liquidity.
It cut its stake to 7.48pc last year to trigger a mechanism for the US move. But in March, UMG said market conditions had forced it to delay its plan for a US listing.
Pershing currently has a 4.7pc stake, making it UMG’s fourth-biggest shareholder. Bollore Group did not respond to a request for comment, while Vivendi declined to comment on the proposal.
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