Bill Ackman’s investment firm, Pershing Square Capital Management, has tabled a buyout offer for Universal Music Group, the world’s largest music company.
The proposal, comprising cash and stock, would see Universal merge with a special purpose acquisition company (SPAC) created by Pershing Square. The deal is estimated to value Universal at around €55 billion (£48 billion).
Universal oversees some of the industry’s most famous assets, including Abbey Road Studios and record labels such as EMI and Island Records.
Its catalogue includes music from iconic artists like [“musical artist”, “The Beatles”, “rock band”], entity [“musical artist”, “Queen”, “rock band”], Adele, Taylor Swift, and Kendrick Lamar.
Under the terms, existing Universal shareholders would receive $5.05 (£3.81) in cash and 0.77 shares of the new SPAC for each Universal share held. Pershing Square already holds a stake in Universal.
Ackman noted that Universal’s share price has “languished” and expressed optimism that the buyout could unlock value and improve performance.
He said: “Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance.
“However, 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.”
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