$56 billion bid for Universal Music

The cash and share offer values ​​Universal Music at around 30.40 euros per share – a premium of 78 percent compared to the last closing price of 17.10 euros. Shares listed in Amsterdam rose 12 percent on Tuesday.

The fund currently holds around 4.7 percent of UMG, making it the fourth largest shareholder behind the French conglomerate Bolloré Group (18 percent), the Paris media company Vivendi and the Chinese technology giant Tencent. Universal Music was previously solely owned by Vivendi.

Pershing’s move comes after UMG postponed plans for a U.S. listing in March, moving away from an agreement with Pershing. Pershing has now exercised its right to make a tender offer, arguing that a New York listing would boost its share price and liquidity.

Since going public in 2021, the stock has lost nearly a third of its value and is currently valued at 21.8 times earnings, compared to around 40 times for Spotify.

In a letter to the UMG board of directors, Ackman also said that management had done an “outstanding” job and led the business strongly. Ackman himself served on the UMG board for some time.

“The offer is non-binding and could well fail, but we believe it at least has the advantage of raising valid questions and making the case for fundamental changes,” said analysts at Dutch bank ING, adding that investors should carefully consider the proposal.

Like other major music labels such as Sony Music Entertainment and Warner Music Group, UMG is struggling to remain competitive in the AI-driven music market.

New UMG

Pershing Square’s plans include merging Universal Music with US-based acquisition vehicle SPARC Holdings and listing the resulting “New UMG” on the New York Stock Exchange. Pershing Square expects the acquisition to close by the end of the year. Ackman has wanted to move the company headquarters and stock exchange listing from Amsterdam to Europe since 2024.

In addition to Universal Music, Pershing also has a stake in Uber, Amazon and Alphabet, among others.