Bill Ackman is trying to pull the biggest deal the recorded‑music business has seen in years. Through his Pershing Square vehicle, the American investor has put a roughly 64 billion dollar price tag on Universal Music Group – about 56 billion euros – signalling he is ready to pay a heavy control premium for the company that sits on the most powerful catalogue of artists and masters in the world. The proposal is more than just financial engineering: it is a bid to take the world’s largest rights owner out of the hands of a broad European shareholder base and place it under a single, highly concentrated sponsor that has built its reputation on activist, long‑term positions in consumer and media names.
If Universal’s board and regulators can be brought onside, the transaction would also change where the stock trades and who can own it at scale. A move from Amsterdam to a U.S. exchange would put UMG directly in the path of the biggest passive and benchmark‑driven portfolios, opening the door to inclusion in headline indices and to liquidity more in line with U.S. entertainment mega‑caps than with a European media outlier.
Parameters of the offer and the amount of the premium
Pershing Square is offering Universal Musicshareholders $UMG.AS a combination of cash and shares in a new company that would be formed by the merger of Universal Music and Pershing Square's acquisition company SPARC Holdings. According to information released so far, shareholders would receive approximately $9 billion to $11 billion in cash and, in addition to each existing UMG share, a stake in the new entity, which would be listed on the New York Stock Exchange. The total offer price comes out to 30.4 euros per share, a premium of more than 50% to the market price.
Universal Music's market capitalization was until recently around thirty to fifty billion euros, so Ackman's offer represents a significant increase in value compared to how the market has valued the company in recent months. Pershing Square argues that such a high premium reflects Universal Music's strategic value and the long-term potential of its music catalogue in an era of rapidly growing streaming.
Ackman's long-term interest in Universal Music
Bill Ackman is not a new name to Universal Music shareholders. Back in 2021, he acquired an approximately ten percent stake in UMG from French group Vivendi for roughly $4 billion through his then vehicle Pershing Square Tontine Holdings. At the time, the company's valuation was based on roughly forty billion dollars, and Ackman profiled himself as a long-time supporter of the music giant and its plans to float on the Amsterdam stock exchange.
Pershing Square is one of the activist investors that has been pushing for changes in corporate governance and capital structure. In recent years, the fund has held significant positions in technology firms such as Alphabet $GOOG, Meta Platforms $META and Amazon $AMZN, demonstrating its focus on large global businesses with distinctive brands and high margins. Universal Music fits well into this strategy because it controls a large catalogue of recordings and rights that generate stable licensing revenues.
The move to the New York Stock Exchange and the cancellation of part of the shares
The proposal includes reorganising the structure of Universal Music to become a company incorporated under the laws of the State of Nevada and listed on the New York Stock Exchange. This would increase the availability of the stock to US institutional investors while opening the way to inclusion in the S&P 500 index, which typically means greater liquidity and a broader investor base.
At the same time, Pershing Square anticipates that approximately seventeen percent of Universal Music's existing shares could be cancelled as part of the transaction without the company losing its investment grade rating or jeopardizing its long-term financial flexibility. Following the settlement of the offer, the new UMG would have approximately one and a half billion shares outstanding and would report results under U.S. GAAP accounting standards. Ackman reckons the entire transaction could close by the end of the year if shareholders and regulators support it.
Criticism of Pershing Square's undervalued stock and arguments
In his statement, Ackman praised the work of Universal Music's management, led by CEO Lucian Grainge, which he said has built a top-notch artist portfolio and provided the company with solid revenue and earnings growth. However, he also points out that he believes the stock price performance does not reflect the true strength of UMG's music business.
Pershing Square points to several factors that he believes contribute to the undervaluation of the title. These include the uncertainty surrounding the group's roughly 18 per cent stake in Bolloré, delayed plans to list the stock in the US, an under-utilised balance sheet that is hampering growth in return on equity, and the absence of a clearly communicated capital allocation plan. Ackman argues that it is the proposed transaction that would solve most of these problems, helping to unlock Universal Music's hidden value for existing and new investors.
Universal Music as a global music leader
Universal Music Group is now the largest record label in the world and home to many of today's most popular artists. Its wings include Taylor Swift, Drake and Kendrick Lamar, and the company also owns the iconic Abbey Road studios and major labels such as EMI and Island Records. Recorded music makes up the majority of its revenue, through more than a dozen labels including Interscope, Capitol Music, Motown Records and Def Jam.
The strength of its catalog, global distribution network and dominant market position are the main reasons Ackman believes in the long-term growth of Universal Music's value. The Pershing Square Fund emphasizes that all equity financing for the offering will be provided by it and its related entities, while bank loans and other forms of debt are to be confirmed upon signing of the commitment documents. Universal Music itself has not yet officially commented on the offer, and the market is now waiting to see whether the company's board of directors will recommend that shareholders agree to Ackman's takeover play.