Billionaire Ackman's investment company will buy Universal Music's largest music label

Bill Ackman's Pershing Square investment company has announced its intention to acquire Universal Music Group (UMG), the world's largest music label, Reuters and CNBC reported. The deal will be paid in cash and stock, with Reuters estimating that it could be worth about €55.75 billion, or about $64.31 billion.

In the first minutes after the opening of trading in Amsterdam, UMG securities jumped by more than 24%, but then slowed down - at the time of publication they are trading in the plus by 15%.

The takeover is expected to be finalized by the end of the year. Universal Music will merge with Pershing Square and list its shares on the New York Stock Exchange, CNBC writes.

Pershing Square said it estimates that Universal Music's securities are worth about €30.4 per share, which implies a premium of more than 77 percent to their last closing price (UMG's securities were worth €17.1 at the close of trading on April 6 in Amsterdam). UMG's share price has stagnated recently "due to a combination of issues unrelated to the performance of its music business," Pershing Square noted. Ekman cited "uncertainty over the French Bollore Group's 18 percent stake in Universal Music", the company' s delayed U.S. listing, and "suboptimal" communication and engagement with shareholders as factors that have negatively impacted the company's results.

All "these difficulties can be resolved with a deal" with Pershing Square, Ackman's company believes.

Universal Music Group, which represents artists such as Taylor Swift, Lady Gaga and Billie Eilish, floated its shares on the Amsterdam stock exchange in 2021, at which time the company's initial market valuation was €46 billion. According to Yahoo Finance, it fell to €31.37 billion at the end of trading on Feb. 6.

UMG was spun off from the French media group Vivendi, which is run by the family of French billionaire Vincent Bolloré. Bolloré retained a stake in the company worth about €5.9 billion.

Ekman in 2024 advocated that UMG move its main stock offering from Amsterdam to a U.S. exchange, arguing that the company's securities were trading at a significant discount to their intrinsic value and had limited liquidity.

Bill Ackman's fortune, according to Forbes, is estimated at $8.9 billion.

This article was AI-translated and verified by a human editor