The insurance company that will earn 60 million dollars from Bill Ackman’s giant deal

Globes has learned that the insurance company Menorah Mitvethim may register a profit of 60 million dollars for its policyholders for its investment in Universal Music, since the insurance company invested 75 million dollars in UMG. According to market sources, Menorah Mivathim is the only institution that invests directly in the company, with the assumption that received Ackman’s approval being that UMG’s strategic assets and its dominance in the global streaming market are not properly priced in the European public market.

UMG, let’s remember, stands behind huge artists, including Lady Gaga and Taylor Swift. In 2021, UMG shares were issued on the Amsterdam Stock Exchange with a value of 46 billion euros. But since then it has lost ground and is currently traded at a value of 35 billion euros (increased following the purchase offer and decreased).

Ackman’s purchase offer is at a price of 30.4 euros per share, a huge premium of 78% on the share price last Thursday. According to the terms of the deal, Universal Music shareholders will receive 9.4 billion euros in cash and the rest, 0.77 shares for each UMG share. The deal is expected to be closed by the end of the year, after which UMG will become a merged company together with Pershing Square and will be listed for trading on the New York Stock Exchange (instead of the Amsterdam Stock Exchange)

Regarding the expected potential, Ackman himself said that “UMG’s stock declined due to a combination of issues that have nothing to do with its performance in the music business, and more importantly, all of them can be addressed through this transaction.”

Menorah Mivathim also owns Farshnig Square

In addition, Menorah Mivathim has an additional investment in the amount of 140 million dollars in Ackman’s own fund, Farshnig Square. Ackman is an active investor who “specializes in identifying companies with strong cash flow and making structural changes to flood value.”

Let’s also mention that Ackman invested in the Tel Aviv Stock Exchange at the beginning of 2024, shortly after October 7 and the outbreak of the Iron Swords War. Ackman purchased almost 5% of the stock exchange’s shares for about NIS 92 million. These shares are worth about NIS 650 million today, following the jump in the local stock market and the stock exchange in particular. Ackman made a 7-fold profit on this investment, in less than two and a half years, or about 560 million Shekel