Universal Music, the world's largest music company, which represents artists such as Taylor Swift and Billy Eilish, has made a confidential application for a US listing. The company's papers already trade in Amsterdam and a second listing is needed as part of an agreement with Bill Ackman's hedge fund Pershing Square, which is a Universal shareholder. He insisted that entering the US market would increase investor interest and help the label get a higher valuation.

Details

Amsterdam-registered and traded Universal Music Group has made a confidential application for a U.S. stock offering, reports its website. In this way, the music label intends to fulfill the terms of a deal with billionaire Bill Ackman's Pershing Square hedge fund, write Bloomberg. He is a major shareholder in Universal, and exercised his right to request a secondary listing, after having long requested it. 

It is specified that the company has filed documents with the US Securities and Exchange Commission (SEC) on behalf of individual shareholders. Universal Music itself will not receive any proceeds from the offering. The filing also states that the number of common shares to be offered to U.S. investors and the price range have not yet been determined.

Universal Music shares rose 2.3% in Amsterdam trading on July 22. They are up 12% since the beginning of the year. The market capitalization of the company is almost €50 billion.  

Context

According to Eckman, a US listing is very favorable for the company, as it can significantly increase demand for its securities and their value. Initially, he insisted on a change of venue, but was only able to secure an agreement for a secondary listing in the US by September - for about $500m. One of the conditions of this deal was that Pershing had to reduce its stake in the music label by the same amount;

In March, Ackman reported that Pershing had sold about 2.7% of all Universal shares in circulation and raised more than €1.3 billion, Bloomberg wrote. Still, Universal remained the largest position in the fund's portfolio, with a weighting of about 17% versus the previous 27%, Eckman wrote on Social Network X at the time. Following the announcement of Pershing's stake cut, the music company's stock price collapsed nearly 9%.

In May, Ackman left Universal's board of directors, citing an increased workload, including an appointment as executive chairman of Howard Hughes Holdings, from which he is trying to turn into an investment firm along the lines of Warren Buffett's Berkshire. 


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

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