Bill Ackman suggests acquiring Universal Music Group for €56 billion.

      Pershing Square’s non-binding proposal estimates Universal Music Group (UMG) at €30.40 per share, representing a 78% premium over its last closing price. Ackman contends that the largest music label in the world has been undervalued due to structural issues, such as the Bolloré Group’s 18% ownership and the delay of a US listing, which are unrelated to its core business.

      Bill Ackman’s Pershing Square Capital Management has put forth a non-binding proposal to the Universal Music Group board to purchase the world’s largest music label in a cash-and-stock arrangement, which Reuters approximates at around €55.75 billion ($64.3 billion). The offer prices UMG at €30.40 per share, a significant 78% premium to the stock’s last closing price of €17.10.

      If accepted, UMG shareholders would receive €5.05 per share in cash, totaling €9.4 billion, along with 0.77 shares of a newly formed entity, New UMG, for each share they own.

      This transaction would be structured as a merger with Pershing Square SPARC Holdings, an SEC-registered acquisition vehicle, with the new company listing on the New York Stock Exchange under US GAAP accounting, making it eligible for inclusion in the S&P 500 index.

      Pershing Square stated that all equity financing would be underwritten by itself and its affiliates, with debt financing committed at the time of signing. The company anticipates the deal to finalize by the end of 2026.

      Ackman has positioned the offer as a solution to structural challenges, rather than a critique of UMG’s music operations. In a letter to UMG’s board, he praised CEO Sir Lucian Grainge for his “excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,” while noting that UMG’s stock price had “languished due to a set of issues that do not relate to the performance of its music business.”

      The four issues he highlighted include: uncertainty surrounding the Bolloré Group’s 18% stake in the company; the postponement of UMG’s intended US stock listing; underutilization of UMG’s balance sheet; and the lack of a publicly disclosed capital allocation strategy and earnings algorithm.

      Pershing Square’s connection with UMG dates back to 2021 when Ackman acquired a 10% stake through a transaction with Vivendi, UMG’s then-parent company. This stake positioned Pershing Square as one of UMG’s largest shareholders prior to UMG’s listing on the Amsterdam Euronext exchange in September 2021.

      However, their relationship has not been without friction; Variety reported that Ackman had been “sparring with UMG management” in the time since. The proposed merger would eliminate approximately 17% of UMG’s outstanding shares, resulting in New UMG having 1.541 billion shares outstanding, while maintaining the company’s investment-grade credit rating.

      Legal counsel for Pershing Square and SPARC includes Sullivan & Cromwell, White & Case, and Stibbe, with Jefferies serving as the financial advisor. The proposal remains non-binding, and UMG’s board has not made a public response as of yet.