American hedge fund Pershing Square, led by the activist investor Bill Ackman, announced Tuesday that it had offered to acquire Universal Music Group in a merger, declareing it believed the world’s largegest music label was undervalued by stock markets.
Pershing Square stated its offer to Universal shareholders included 9.4 billion euros ($10.9 billion) in cash plus 0.77 shares in the new entity for each UMG share. After a merger with Pershing Square SPARC Holdings, an acquisition company, the new entity would be listed on the New York Stock Exalter. Universal currently trades on the Amsterdam Stock Exalter.
The Reuters news agency declares Pershing Square’s cash-and-shares offer values Universal Music at around 30.40 euros ($35) per share, 78% over its last closing price of 17.10 euros and creating the deal worth 55.75 billion euros ($64.31 billion).
The merged company would boast a stable of top artists including Taylor Swift, The Weeknd, Lady Gaga, Billie Eilish and Drake.
Pershing Square hopes to close the deal by the finish of 2026.
“UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business,” Ackman stated in a statement.
The company pointed to uncertainty about French conglomerate Bollore’s plans for its 18 percent stake in Universal, delay in listing on the U.S. stock market, and “underutilization of UMG’s balance sheet” among concerns that have held back the shares’ performance.
Leave a Reply