Universal Music Group, the entertainment giant behind acts such as Taylor Swift, Sabrina Carpenter, and Kendrick Lamar, has received a takeover offer estimated to be worth $64.3 billion (£48 billion). US investment company Pershing Square is offering to buy Universal in a merger that would see the new company listed in America, according to billionaire chief executive Bill Ackman.
In addition to a substantial roster of famous artists, the world’s largest music company runs the iconic Abbey Road studios and owns renowned labels like EMI and Island Records. Pershing Square holds a stake in Universal and has investments in major companies such as Google, Meta, and Amazon, as well as in Restaurant Brands International, which includes Burger King.
In a letter to UMG's board of directors on Tuesday, Ackman praised the management for nurturing a world-class artist roster and generating strong business performance. However, he noted that the stock price has "languished" due to factors unrelated to its music business, which he believes could be addressed with this transaction. He specifically pointed to uncertainty surrounding Bolloré Group's 18% stake and the postponement of its US listing as contributors to the current issues.
If the deal goes through, UMG shareholders are expected to receive €9.4 billion in cash (or €5.05 per share) along with shares in the new entity, which is planned to be listed on the New York Stock Exchange. Following the announcement, UMG shares saw an increase of around 11% in early trading. The company has yet to comment on the proposal.
In addition to a substantial roster of famous artists, the world’s largest music company runs the iconic Abbey Road studios and owns renowned labels like EMI and Island Records. Pershing Square holds a stake in Universal and has investments in major companies such as Google, Meta, and Amazon, as well as in Restaurant Brands International, which includes Burger King.
In a letter to UMG's board of directors on Tuesday, Ackman praised the management for nurturing a world-class artist roster and generating strong business performance. However, he noted that the stock price has "languished" due to factors unrelated to its music business, which he believes could be addressed with this transaction. He specifically pointed to uncertainty surrounding Bolloré Group's 18% stake and the postponement of its US listing as contributors to the current issues.
If the deal goes through, UMG shareholders are expected to receive €9.4 billion in cash (or €5.05 per share) along with shares in the new entity, which is planned to be listed on the New York Stock Exchange. Following the announcement, UMG shares saw an increase of around 11% in early trading. The company has yet to comment on the proposal.
