Billionaire investor launches $65 billion Universal Music takeover bid

Billionaire capitalist Bill Ackman has launched a $65 cardinal bid to acquisition Universal Music, the statement representing immoderate of music’s biggest names similar Taylor Swift, Kendrick Lamar and Bad Bunny.

As portion of the projected deal, UMG would merge with Ackman’s concern firm, Pershing Square Capital Management, and the company’s banal listing would beryllium relocated from Amsterdam to the New York Stock Exchange.

Pershing Square already holds much than 4.5% of the euphony giant’s shares. Ackman said the determination to a U.S.-based banal speech would summation the worth of UMG .

“UMG’s banal terms has languished owed to a operation of issues that are unrelated to the show of its euphony concern and importantly, each of them tin beryllium addressed with this transaction,” said Ackman successful a statement.

The projected woody includes Universal Music merging with Pershing Square SPARC Holdings, an acquisition institution approved by the Securities and Exchange Commission successful 2023. If agreed upon, the projected transaction could adjacent astatine the extremity of the year, according to the company.

Universal Music Group presently has its firm office successful the Netherlands and a section L.A. bureau successful Santa Monica. The statement was founded successful 1996. Over the years, it’s cemented its estimation arsenic 1 of the euphony industry’s “Big Three,” alongside Warner Music Group and Sony Music Entertainment. Universal besides controls smaller labels similar Republic Records, Interscope Geffen A&M, Capitol Music Group, and Def Jam Recordings.

The quality has drawn a level of skepticism, arsenic Ackman volition request two-thirds of UMG’s investors to o.k. the projected deal, including French billionaire Vincent Bolloré, who is UMG’s largest shareholder with a morethan 18% stake, according to Bloomberg.

If finalized, UMG shareholders would person €9.4 cardinal successful cash, astir €5.05 per share, oregon astir $10.9 cardinal and $5.84 per share.

Investors would person 0.77 shares successful the caller merged company. This would worth the full information bundle of currency and banal estimated to beryllium worthy €30.40 per share, a 78% premium to UMG’s banal price. The transaction volition besides see the cancellation of 17% of UMG outstanding shares. The caller UMG volition person 1.541 cardinal shares outstanding.

UMG’s banal terms has jumped implicit 11% to €19.05 Tuesday morning, owed to this imaginable acquisition.