Universal Music Group Receives £48bn Takeover Bid from Pershing Square
Universal Music Group Targeted in £48bn Takeover
Universal Music Group (UMG), the esteemed music giant representing artists such as Taylor Swift and Kendrick Lamar, and proprietor of iconic labels like EMI and Island Records, has received a takeover offer from US investment company Pershing Square, estimated at a substantial £48bn.
Bill Ackman, the billionaire chief executive of Pershing Square, stated that the proposed merger would culminate in the new company being listed in America. Pershing Square already holds a stake in UMG and boasts a diverse portfolio including investments in Google, Meta, and Amazon.
Mr. Ackman lauded UMG's management for their exceptional work in cultivating a world-class artist roster and driving robust business performance. He highlighted UMG's industry-reshaping efforts, placing artists at the forefront, and its proactive stance on leveraging artificial intelligence while safeguarding intellectual property.
However, Mr. Ackman expressed concern that UMG's stock price had "languished" due to factors unrelated to its core music operations. He believes these issues could be "addressed with this transaction." In a letter to UMG's board, he cited the company's "dramatically underperformed" status against key US and global stock indexes, attributing this to various factors including uncertainty surrounding Bolloré Group's 18% stake and the postponement of UMG's US listing.
Under the terms of the deal, UMG shareholders would receive a total of €9.4bn in cash (€5.05 per share) and 0.77 shares in the new company for each Universal share owned. The new entity would subsequently be listed on the New York Stock Exchange. The proposal also includes a "refreshed" board, potentially featuring former Walt Disney Company president Michael Ovitz. Pershing Square aims to finalise the deal by the year's end. Following the announcement, UMG's shares saw an approximate 11% increase in early trading.
