Bill Ackman‘s Pershing Square said on Tuesday (April 7) that it made a non-binding offer to buy Universal Music Group in a deal that values the world’s largest music company at more than $60 billion. UMG’s stock was up more than 8.5% on news of the offer.
Related
The proposed deal would see UMG merge with Pershing Square SPARC Holdings, and would move the new entity’s headquarters from the Netherlands to Nevada and move its stock from the Euronext Amsterdam to the New York Stock Exchange, something Ackman has lobbied for since 2024.
In a letter to UMG’s board of directors, Ackman praised UMG’s Chairman and CEO Sir Lucian Grainge and the company’s revenue and profit growth since Pershing first became a shareholder more than four years ago. Ackman wrote that the company’s share price has suffered from uncertainty over big UMG investor Bolloré Group’s 18% stake, its decision to delay a U.S. stock offering and the under-utilization of the company’s balance sheet.
Related
“While business performance has been strong, UMG’s share price has languished,” Ackman wrote in a letter to UMG’s board of directors. “Notably, none of the above issues relate to the company’s execution of its music business, and importantly, all of the above issues can be addressed in a merger transaction.”
UMG has grown revenues by 11% and increased adjusted earnings before income, tax, depreciation and amortization (EBITDA) by 13% annually, exceeding Ackman’s projections, he wrote. Yet, UMG’s public listing is down 23% from €25.10, its closing price on the first day of trading, and the company’s share price has “dramatically underperformed the MSCI World Index and S&P 500 indices.”
Ackman also said that the lack of investor “credit” in UMG’s 2.7 billion euro ($3.1 billion) stake in Spotify, its lack of publicly disclosed capital allocation plan and “suboptimal” investor relations and external communications had all contributed to UMG’s depressed share price.
The billionaire hedge fund investor and former UMG board member wrote that they expect the transaction to close before the end of the year.
Pershing’s proposed deal would give shareholders €9.4 billion total in cash (or €5.05 per share), with each share of UMG being replaced with a 0.77 share of the new company’s stock. The new company would issue financial disclosures under U.S. GAAP accounting rules and could in the future be included in the S&P 500 or other major indexes, something that would significantly boost the company’s investor base and share performance. The deal would cancel 17% of UMG’s outstanding shares and leave the new company with 1.541 billion shares outstanding.
Ackman wrote they will finance the deal through a combination of cash from Pershing Square and SPARC’s rightsholders, 5.4 billion euros ($6.2 billion) in financing and by selling UMG’s stake in Spotify.
“UMG artists will also benefit from the transaction by receiving up to €750 million ($865 million) in proceeds from the sale of Spotify shares,” Ackman wrote, saying Pershing will waive its right to sponsor warrants.
Pershing’s proposal would require two-thirds of shares voted in support of the deal. UMG’s other significant shareholders include Vincent Bollore, the former chairman of Vivendi, Vivendi SE and China’s Tencent.
In July 2025, the chairman and head of Bolloré Group, Cyrille Bolloré, resigned from his seat on UMG’s board saying, he did so to focuson the Bolloré Group, which is under scrutiny from French securities regulators that earlier blocked a proposal to buy out certain companies.
Ackman is a billionaire hedge fund investor is a former Universal Music Group director who stepped down last spring.
In November 2024, Ackman advocatedfor moving the fund and UMG’s listingfrom the main Netherlands’ stock exchange after fans of an Israeli soccer team were attacked in early November in Amsterdam.
