\n<\/p>\n
Billionaire Bill Ackman\u2019s hedge fund has offered to buy Universal Music Group (UMG) in a deal that values the world\u2019s biggest music company at about \u20ac55bn (\u00a348bn).<\/p>\n
Pershing Square, the New-York based hedge fund, has made a bid for the business, which is home to artists including Taylor Swift and Elton John, with a cash and stock deal that would move its stock market listing from Amsterdam to New York.<\/p>\n
Ackman said in a statement that while the company, which is led by the British-born Sir Lucian Grainge, had done \u201can excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance\u201d, its share price had lagged owing to issues \u201cunrelated to the performance of its music business\u201d.<\/p>\n
Shares in UMG, which have been listed in Amsterdam since 2021, had lost more than a quarter of their value in the past year alone. Pershing\u2019s offer triggered a sharp rise, with the price up by 13% on the previous trading day when the Amsterdam Euronext exchange closed on Tuesday.<\/p>\n
The company is one of the \u201cbig three\u201d record labels, alongside Sony Music Entertainment and Warner Music Group. Its roster ranges from classical musicians to stars such as Adele, Drake and Ariana Grande.<\/p>\n
Ackman blamed its previous poor share price performance partly on the delay of UMG\u2019s listing in the US, underutilisation of its balance sheet and uncertainty around the French conglomerate Bollor\u00e9 Group\u2019s 18% stake in the company.<\/p>\n
The French billionaire Vincent Bollor\u00e9 and his family are the biggest single shareholders in the business, holding a further 10% via his Vivendi media conglomerate. Bollor\u00e9 orchestrated the listing of UMG in Amsterdam in 2021, spinning the company out of the most valuable part of Vivendi.<\/p>\n
On a call with investors on Tuesday, Ackman said he had spoken to Bollor\u00e9 and his investment group and claimed that they were \u201cintrigued\u201d with the proposal. Pershing Square is \u201cconfident that this is a transaction that addresses everyone\u2019s concerns\u201d, he said.<\/p>\n
Ackman also cited a \u201clack of investor credit\u201d in the company\u2019s valuation of its \u20ac2.7bn stake in the music streaming service Spotify.<\/p>\n
Pershing Square, which Ackman set up in 2004, controls more than $26bn in assets. The fund bought a 10% stake in UMG in 2021, though Ackman resigned from its board of directors last year, citing other commitments.<\/p>\n
Dan Coatsworth, the head of markets at AJ Bell, said Ackman would need \u201ca full-on charm offensive\u201d to win over UMG\u2019s major shareholders.<\/p>\n
\u201cBill Ackman has long admired Warren Buffett\u2019s style of finding good companies going cheap and buying them outright. Ackman has now gone full-on Buffett with a takeover offer for Universal Music Group (UMG) via one of his Pershing Square investment vehicles,\u201d Coatsworth said.<\/p>\n
While Ackman said Grainge and his management team had done an \u201cexcellent job\u201d at the company, as part of the proposed deal the hedge fund would add Michael Ovitz, a veteran talent agent, as chair, as well as two representatives from Pershing Square to the company\u2019s board.<\/p>\n
The deal would also be subject to a \u201cnew employment contract and compensation arrangement for Sir Lucian Grainge\u201d, Ackman said in a letter to the board of directors at UMG.<\/p>\n
Grainge was paid more than \u20ac41m last year, in a package that included a \u20ac4.4m base salary and more than \u20ac30m in bonuses.<\/p>\n
Under the proposed deal, UMG would merge with a blank-cheque company set up by Pershing Square, and then list on the New York Stock Exchange. Shareholders would receive a total of \u20ac9.4bn in cash and 0.77 shares in the new company for every Universal share they own. Together, that would represent a 78% premium compared with the company\u2019s closing share price on Thursday, Pershing said.<\/p>\n
UMG was approached for comment.<\/p>\n","protected":false},"excerpt":{"rendered":"
Billionaire Bill Ackman\u2019s hedge fund has offered to buy Universal Music Group (UMG) in a deal that values the world\u2019s biggest music company at about \u20ac55bn (\u00a348bn). Pershing Square, the New-York based hedge fund, has made a bid for the business, which is home to artists including Taylor Swift and Elton John, with a cash<\/p>\n","protected":false},"author":1,"featured_media":48014,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[4655,3608,456,1545,686,1990,10540,9225,3670,3611,8731],"class_list":{"0":"post-48013","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-55bn","9":"tag-drake","10":"tag-home","11":"tag-industry","12":"tag-music","13":"tag-offer","14":"tag-receives","15":"tag-swift","16":"tag-takeover","17":"tag-taylor","18":"tag-universal"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48013","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=48013"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/48013\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/48014"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=48013"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=48013"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=48013"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}