Bill Ackman’s Pershing Square Capital has offered to buy Universal Music Group in a mostly stock deal that values the world’s biggest record label at about €55bn and would shift its listing from Amsterdam to New York.
As reported by FT, the proposed transaction would merge Universal, home to artists including Taylor Swift and Kendrick Lamar, with a blank-cheque company set up by Ackman, one of the world’s best-known hedge fund managers.
The move comes as the explosive growth of AI reverberates across the music industry, with investors fearful that the technology could erode profits at the handful of dominant labels and threaten their copyright.
Shares in Universal, which listed in Amsterdam in 2021 after it was spun out by French media group Vivendi, have slumped more than 30 per cent over the past six months.
The shares rose 11.4 per cent to just over €19.05 on Tuesday after Pershing, which already owns a stake in Universal, set out the terms of a deal that it said valued the music company at €30.40 a share.
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However, that figure assumes a higher valuation for the new company, based on Pershing’s earnings forecasts and a plan to sell Universal’s stake in music streamer Spotify for €1.5bn in net proceeds.
Under the deal, Universal shareholders would receive €5.05 in cash — a total of €9.4bn — and 0.77 shares in the new company for every Universal share they owned, Pershing said.
Announcing the plan, Ackman said: “UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and, importantly, all of them can be addressed with this transaction.”
The deal would need to be approved by two-thirds of Universal shareholders who vote at a meeting — a threshold the hedge fund billionaire said he was confident of clearing.
Matt Pincus, a longtime music investor who runs a LionTree-backed fund, is sceptical of Ackman’s proposal, likening it to the failed blank-cheque companies of the pandemic era.
“He’s saying: this is a 75 per cent premium to the value of Universal’s stock. But I’m only giving shareholders $5bn in cash, and the rest of it I’m giving them in a publicly listed blank cheque company, with the idea that simply moving it to a US listing creates the uplift. It’s basically ‘add water and you get a higher valuation’. But where is the real value creation?”
A critical factor will be the stance of the Bolloré Group, Universal’s largest shareholder, which holds 28 per cent of the company, including the 10 per cent holding of Vivendi, in which it is the largest shareholder.
Ackman said the “first phone call” he made the day before going public with his proposal had been to the French conglomerate.
“The words I got back were: ‘This is music to our ears,’” he said, adding that the group was “intrigued” but that “the devil is in the details”. He cautioned that “without Bolloré we don’t have a transaction”.
Another large shareholder said Ackman’s diagnosis of Universal’s problems was correct though a takeover was not required to address these, adding that Bolloré would be “kingmaker” in any deal.
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Vivendi shares closed up more than 9 per cent on Tuesday for a market value of €2bn, while Bolloré Group’s gained 3.8 per cent for a market capitalisation of €14.3bn.
Universal did not immediately respond to the proposal. The Bolloré Group did not respond to a request for comment. Vivendi declined to comment.
Ackman’s pursuit of Universal has been years in the making. Pershing Square built a roughly 10 per cent stake in 2021 ahead of the group’s Amsterdam listing.
The investment was originally planned to be executed through his pandemic-era blank-cheque vehicle, but the structure collapsed under regulatory scrutiny. Ackman’s hedge fund stepped in instead, leaving Universal as one of Pershing Square’s largest positions.
Ackman joined Universal’s board and became a vocal champion of the company, arguing ownership of music rights — from the Beatles to Taylor Swift — offered “forever” cash flows in the streaming era.
But Universal’s shares have lagged behind broader markets since the listing, and disagreements emerged over how to unlock value. Ackman pushed for changes including a US listing to attract a deeper pool of investors and improve liquidity.
He quit the board in 2025 and trimmed his stake but has continued to argue that Universal is undervalued.
Last month, Universal delayed its own plan for a secondary listing in New York, saying that “uncertainty” had created a “meaningful dislocation” in the company’s valuation.
Under Ackman’s proposal, former Disney president Michael Ovitz would become Universal’s chair and two Pershing representatives would join the board.
Ackman said he and Ovitz had presented their proposal to Universal chief executive Sir Lucian Grainge over dinner in recent weeks.
He added that Grainge had encouraged them to submit a formal proposal that the company would “take a hard look at”.
Any deal would require Universal’s board approval and is contingent on Grainge remaining as CEO.
China’s Tencent is Universal’s second-largest shareholder with an 11.4 per cent stake, while Singapore’s GIC sovereign wealth fund holds a nearly 5 per cent stake.
Pershing Square would put in €2.5bn, including €1.05bn from investors in Ackman’s blank-cheque vehicle Sparc Holdings, with the new Universal Music entity borrowing an additional €5.4bn, according to Ackman’s letter to the company’s board.
Some industry executives questioned whether the takeover attempt was intended to secure control of Universal, or to force through changes Ackman had advocated as a board member, such as the US listing.
Ackman is known for making multibillion-dollar bets on public companies that he regards as attractively priced, high-quality businesses with pricing power in their sectors. He has large stakes in companies such as Alphabet, Amazon and Brookfield, with his main hedge fund managing almost $18bn.
The hedge fund manager is in the middle of an IPO process for Pershing Square USA, a new closed-end fund to be listed on the New York Stock Exchange. Ackman aims to raise between $5bn and $10bn in a transaction that will also give investors a slice of his hedge fund’s management company.
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