BillAckman‘shedge fund has made a bold move, proposing a $64 billion merger deal withUniversal Music Group (UMG), the world’s largest music label. The merger would unite UMG’s impressive roster of artists, includingTaylor Swift, Billie Eilish, and Kendrick Lamar, with Pershing Square’s investment expertise.
Billionaire Bill Ackman bids for Taylor Swift’s label, UMG
Bill Ackman’s Pershing Square Capital Management is making waves with a $64 billion proposal to merge with UMG. The deal values UMG at around $35 per share, a 78% premium to its last closing price, and would see the company listed on the New York Stock Exchange.
The proposed merger would involve Pershing Square’s SPARC Holdings uniting with UMG, with its shareholders receiving $10.85 billion in cash and 0.77 shares in the new company for every share held. Michael Ovitz, former Disney president, would join as board chair, and Lucian Grainge would remain UMG’s CEO.
Interestingly, UMG shares jumped 11% on the news of Bill Ackman’s $64 billion takeover proposal, reflecting the market’s enthusiasm for the deal. Additionally, Vivendi and Bolloré also rose 11% and 6.3% respectively, on news of the proposal.
For those unaware, UMG was spun off from Vivendi SE in 2021. It debuted on Euronext Amsterdam with a $53.18 billion valuation.
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As reported on Bloomberg News, UMG’s stock remains below Bill Ackman’s proposed buyout price despite the initial surge, raising doubts about the deal’s feasibility. Getting key shareholders like Vincent Bolloré on board is crucial, as he holds over 18% of the company.
However, analysts aren’t optimistic about the proposal’s chances. Without Bolloré’s support, Ackman’s “proposal looks very much dead from the start,” says Nicolas Marmurek, an analyst at Square Global.
Meanwhile, Bill Ackman claims he has already spoken with Bolloré. He said that the proposal has “intrigued” the media mogul, but it’s unclear if he’ll back it. Ackman also thinks UMG’s stock remains undervalued due to non-music-related issues that the deal could fix.
As of now, UMG and Bolloré have not responded to comment requests. Vivendi, on the other hand, has declined to comment.
Originally reported by Sibanee Gogoi onMandatory.
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