Bill Ackman-Led Pershing Square’s Acquisition Proposal Sends UMG Stock Soaring

• Pershing Square CEO Ackman stated that the issues dragging down the UMG stock would be addressed by this deal.
• Pershing Square highlighted some of the issues weighing on UMG stock, including the postponement of UMG’s U.S. listing and the underutilization of its balance sheet, among other factors.
• The company stated that UMG will be merged with Pershing Square SPARC Holdings, and the new entity will be listed on the New York Stock Exchange.

Bill Ackman-led Pershing Square Capital Management’s (PSHZF) proposal to acquire Universal Music Group NV (UMGNF) sent UMG stock soaring on Tuesday.

Pershing Square announced that UMG shareholders will receive €5.05 ($5.84) per UMG share, amounting to €9.4 billion in total.

The company said the cash-and-stock deal values UMG at €30.4 per share, representing a 78% premium over Universal Music’s last closing price.

UMG’s shares were up nearly 11% at the time of writing.

Ackman Says Deal Would Address Issues Pulling Down UMG Stock

Pershing Square CEO Bill Ackman stated that the issues dragging down the UMG stock would be addressed by this deal.

“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,” Ackman said.

Pershing Square highlighted some of the issues dragging down the UMG stock, including the postponement of UMG’s listing in the U.S., the underutilization of its balance sheet, which it says has led to reduced returns on equity, and the absence of a publicly disclosed capital allocation plan, as well as the earnings algorithm.

The company also stated that there is uncertainty regarding the Bolloré Group’s 18% stake in UMG, and noted that Universal Music Group’s investor relations and communications are suboptimal.

UMG To Be Listed On NYSE Post Merger

Pershing Square also stated that UMG will be merged with Pershing Square SPARC Holdings, and the new entity will be incorporated in Nevada. The merged entity will also be listed on the New York Stock Exchange, the company said.

Pershing Square also added that the newly merged entity, New UMG, will publish its financial statements under U.S. GAAP and be eligible for inclusion in the S&P 500 and other indexes.

UMG was spun out of Vivendi in 2021, with the company’s controlling shareholder, the Vincent Bolloré-led Bolloré Group, retaining a stake. According to the Bolloré Group’s latest disclosure as of Dec. 31, 2024, it held an 18.5% stake in UMG.

UMGNF stock is down 15% year-to-date, while PSHZF stock is down 17%. The VistaShares Target 15 ACKtivist Select Income ETF (ACKY) is down 11% over the past 12 months.

€1 = $1.16

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