Billionaire Investor Launches $65 Billion Universal Music Takeover Bid

Billionaire investor Bill Ackman has launched a $65 cardinal bid to acquisition Universal Music, nan explanation representing immoderate of music’s biggest names for illustration Taylor Swift, Kendrick Lamar and Bad Bunny.

As portion of nan projected deal, UMG would merge pinch Ackman’s finance firm, Pershing Square Capital Management, and nan company’s banal listing would beryllium relocated from Amsterdam to nan New York Stock Exchange.

Pershing Square already holds much than 4.5% of nan euphony giant’s shares. Ackman said nan move to a U.S.-based banal speech would summation nan worth of UMG .

“UMG’s banal value has languished owed to a operation of issues that are unrelated to nan capacity of its euphony business and importantly, each of them tin beryllium addressed pinch this transaction,” said Ackman successful a statement.

The projected woody includes Universal Music merging pinch Pershing Square SPARC Holdings, an acquisition institution approved by nan Securities and Exchange Commission successful 2023. If agreed upon, nan projected transaction could adjacent astatine nan extremity of nan year, according to nan company.

Universal Music Group presently has its firm office successful nan Netherlands and a section L.A. agency successful Santa Monica. The explanation was founded successful 1996. Over nan years, it’s cemented its estimation arsenic 1 of nan euphony industry’s “Big Three,” alongside Warner Music Group and Sony Music Entertainment. Universal besides controls smaller labels for illustration Republic Records, Interscope Geffen A&M, Capitol Music Group, and Def Jam Recordings.

The news has drawn a level of skepticism, arsenic Ackman will request two-thirds of UMG’s investors to o.k. nan projected deal, including French billionaire Vincent Bolloré, who is UMG’s largest shareholder pinch a morethan 18% stake, according to Bloomberg.

If finalized, UMG shareholders would person €9.4 cardinal successful cash, astir €5.05 per share, aliases astir $10.9 cardinal and $5.84 per share.

Investors would person 0.77 shares successful nan caller merged company. This would worth nan full information package of rate and banal estimated to beryllium worthy €30.40 per share, a 78% premium to UMG’s banal price. The transaction will besides see nan cancellation of 17% of UMG outstanding shares. The caller UMG will person 1.541 cardinal shares outstanding.

UMG’s banal value has jumped complete 11% to €19.05 Tuesday morning, owed to this imaginable acquisition.