Five years after making its first attempt to acquire a stake in Universal Music Group , Pershing Square , the firm of billionaire Bill Ackman , is raising the stakes in a new attempt to buy the record label behind artists such as Taylor Swift, Bad Bunny, Bruno Mars, and Ariana Grande.
The investment firm announced on Tuesday, April 7, that it had made an offer to acquire Universal Music Group in a deal that values the company at approximately €55.7 billion (US$63.5 billion) and involves orchestrating a rather complex arrangement.
Under the terms put on the table, the transaction, split between cash and shares, values the business at €30.40 per share, which would represent a 78% premium over the share price of €17.10 at the close of trading on Monday, April 6.
According to Pershing Square, the deal would allow the new company to divest 17% of its shares, which would translate to an equity value of approximately US$58 billion after the cash payment.
This figure is based on the premise that the value of the shares in the new operation will be substantially higher than the current level. According to the asset manager, this would be possible because, in line with the proposal, the new company would assume €5.4 billion in debt and sell its stake in Spotify for €1.5 billion.
Alternatively, to value the deal, Universal Music shareholders could choose to receive all the shares or the entire amount in cash. If a sufficient number of them opt only for the shares, those who choose the cash option will receive €22 per share.
The deal would be made possible through a merger with Pershing Square SPARC Holding, a Special Purpose Acquisition Rights Company (SPARC), in practice, a variation of Special Purpose Acquisition Companies (SPACs) or "blank check companies".
In the first model, the SPAC raises capital in the capital market and seeks a target for an acquisition. In the SPARC, the initial premise is precisely the opposite. The process begins with the selection of the asset and, subsequently, the raising of the amount needed to complete the agreement.
The management company also informed that, following the merger, the new company would be headquartered in Nevada, USA, and would transfer the listing of its shares from the Amsterdam Stock Exchange to the New York Stock Exchange. It would also appoint a new board, which would include Michael Ovitz, former president of Disney.
“Universal Music’s stock price has been down due to a combination of problems unrelated to the performance of its music business, and most importantly, all of them can be resolved with this transaction,” Ackman said in a proposal submitted to the group, according to The Wall Street Journal.
Ackman further stated that the company's management did an excellent job running the business. However, he attributed the low share price to issues such as the delay in the planned US listing and the underutilization of the balance sheet.
Shares of Universal Music rose more than 12% in Amsterdam on Tuesday. Around 2:20 PM (local time), they were up 8.98%, valuing the group at €34.1 billion. However, year-to-date, the shares are down more than 16%.
Despite this initial reaction, the path to obtaining a green light for the transaction, as well as the terms of the proposal, is not easy. The agreement will need to be approved by two-thirds of Universal Music's shareholders.
Currently, the main shareholders of the business are the Bolloré family, with a stake of over 18%; the French conglomerate Vivendi, also controlled by the clan, with another 10%; and the Chinese company Tencent, with approximately 11%.
If this complex arrangement sounds like music to the ears of these shareholders, the deal would represent a victory for Ackman, who, in 2021, made his first attempt to buy a 10% stake in the record label through a SPAC, in this case, Pershing Square Tontine Holdings.
However, shortly afterward, Ackman withdrew the approximately $4 billion offer after the Securities and Exchange Commission (SEC) raised a number of questions about the structure of the operation, which also included a listing on the New York Stock Exchange.
At the time, the solution found by the billionaire was the direct purchase of 7.1% of Universal Music through Pershing Square's own hedge fund, in a transaction of approximately US$2.8 billion. This stake later grew to 10%.
A year after this move, Ackman took a seat on the label's board of directors, which became one of the largest positions held by Pershing Square. In 2025, however, he left the board, citing other commitments.
