Bill Ackman’s Pershing Square Reportedly Seeks To Sell 80.6M Universal Music Shares After Takeover Rejection

• Universal Music rejected Ackman’s takeover proposal, saying it undervalued the company’s long-term prospects.
  The bid had valued the record label at roughly €56 billion.
  Ackman has held a stake in Universal Music since 2021 and previously served on its board.

Bill Ackman is reportedly moving to reduce his exposure to Universal Music Group (UMGNF) shortly after the company pushed back on his takeover proposal, marking a fresh twist in his long-running interest in the world’s largest record label.

80.6 Million Universal Music Shares Set For Sale

Ackman’s hedge fund, Pershing Square, is planning to offload about 80.6 million Universal Music shares through an overnight placement, reported Bloomberg, citing a Bank of America press release issued on Wednesday.

The shares are being marketed in a price range of €17.66 ($20.48) to €18.62 ($21.59) each, with the transaction potentially generating around €1.5 billion ($1.74 billion) at the top end of the range, based on terms seen by Bloomberg. 

Bid Rejected Just Days Earlier

The planned sale comes just days after Universal Music rejected Ackman’s acquisition offer, which would have valued the company at roughly €56 billion ($65 billion).

The Amsterdam-listed firm, home to artists such as Taylor Swift and Drake, said last week that the proposal “fundamentally and materially undervalues Universal Music Group and will not deliver superior value creation.”

Following the development, Universal Music’s American depositary receipts fell as much as 7% on Wednesday, reported Bloomberg. 

Long-Term Bet On Music Industry Faces New Pressure

Ackman has been building exposure to Universal Music since 2021 and previously held a board seat at the company.

The music industry has benefited in recent years from the rise of streaming platforms like Spotify, which boosted revenues and the value of music catalogs. However, growth has slowed more recently, with the sector now also facing increasing pressure from artificial intelligence tools capable of replicating music.

Ackman’s attempted acquisition had involved a complex structure, including a potential merger with a publicly traded special purpose acquisition vehicle and a plan to shift Universal’s listing from the Netherlands to the United States.

He had stated that such changes could help unlock a higher market valuation for the company.

PS stock is up nearly 48% year-to-date. 

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