Wall Street heavyweight Bill Ackman is making a massive play for the music industry, proposing a $64 billion acquisition of Universal Music Group through his investment firm Pershing Square Capital Management. The record label represents chart-topping artists including Taylor Swift and Bad Bunny.
Under the proposed arrangement, Universal Music would combine with Pershing Square SPARC Holdings, a acquisition vehicle that received Securities and Exchange Commission approval in 2023. The merged entity would relocate its headquarters to Nevada and shift its stock trading from Amsterdam to the New York Stock Exchange.
“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,” Ackman stated on Tuesday.
The offer breaks down to 30.40 euros per share, equivalent to $35.12, placing Universal Music’s total worth at roughly 56 billion euros considering all outstanding shares.
Under the deal structure, Universal Music investors would collect 9.4 billion euros in cash payments (5.05 euros per share) plus 0.77 shares in the new combined company for every Universal Music share they currently hold.
Universal Music has not yet provided a response to requests for comment regarding the proposal.
Pershing Square expects the deal to reach completion before the end of 2024.
This marks Ackman’s second attempt at acquiring a piece of Universal Music. In 2021, he abandoned plans to secure a 10% ownership stake after the SEC raised concerns about whether special-purpose acquisition company regulations would permit such a transaction under New York Stock Exchange guidelines.
Universal Music shares jumped over 10% during midday Amsterdam trading following the announcement.
