Activist investor Bill Ackman’s Pershing Square Capital Management has submitted a non-binding proposal to the Board of Directors of music label Universal Music Group to acquire all outstanding shares of UMG for $64 billion.
Under the proposed agreement, Universal Music would merge with Pershing Square SPARC Holdings. The plan calls for the newly formed company to be headquartered in Nevada and to shift its stock listing from Amsterdam to the New York Stock Exchange.
“Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,” said Pershing Square CEO Bill Ackman. “However, 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.”
Pershing Square believes that UMG’s stock price underperformance is principally due to uncertainty concerning the Bolloré Group’s 18 percent stake in the company and the postponement of UMG’s U.S. listing, among other factors.
All transaction equity financing will be backstopped by Pershing Square and affiliates, and all debt financing will be committed at signing.
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