Pershing Square Launches $64B Universal Music Takeover
Bill Ackman's Pershing Square offers 78% premium for Universal Music Group in cash-and-stock deal that would move Taylor Swift's label to NYSE.
Bill Ackman is making his biggest bet yet.
Pershing Square unveiled a $64.4 billion takeover offer for Universal Music Group on Monday, proposing to buy the world's largest music company at a 78% premium to its recent trading price. UMG shares surged as much as 24% in Amsterdam on the news.
The deal values UMG at 30.40 euros per share, combining 9.4 billion euros in cash with 0.77 shares of a new holding company for each UMG share. If completed, the merged entity would list on the New York Stock Exchange—a move Ackman has been pushing for years.
The Strategic Pitch
Ackman's thesis is straightforward: UMG trades at a massive discount to its intrinsic value because it's listed in Amsterdam with limited liquidity. Moving to the NYSE would unlock that value by bringing the company to a deeper pool of institutional investors.
He's not wrong about the discount. UMG has traded down 35% from its 2021 IPO price despite strong fundamentals. The company controls roughly 32% of the global recorded music market, owns catalogs from Taylor Swift, Drake, and The Beatles, and generates consistent cash flow from streaming royalties.
Pershing Square already owns 4.5% of UMG, having built its position since 2021 when Ackman famously tried—and failed—to use his SPAC to acquire a stake in the company. That deal collapsed under SEC scrutiny, but Ackman never lost interest.
Deal Mechanics
The financing structure relies on three sources: 5.4 billion euros in new debt, 1.5 billion euros from partially selling UMG's Spotify stake, and the equity contribution from Pershing Square's SPARC Holdings vehicle.
SPARC is an unusual entity. Unlike traditional SPACs, it has no expiration date and gives existing holders the right—but not obligation—to buy shares in the merged company. This structure avoids the redemption risk that killed many SPAC deals in 2023-2024.
The proposal includes a board refresh. Former Disney president Michael Ovitz would become chairman, with two Pershing representatives also taking seats. UMG CEO Lucian Grainge would remain in place with a new employment contract.
What Happens Next
UMG's board hasn't formally responded. The company acknowledged receiving the proposal and said it would "carefully evaluate" the offer in consultation with advisors.
There's no guarantee this gets done. Vivendi, which spun off UMG in 2021, no longer controls the company but Vincent Bollore's family still holds significant influence through their remaining stake. French media reports suggest Bollore may oppose a U.S. relisting.
Regulatory approval would also be required in multiple jurisdictions. Music licensing involves complex antitrust considerations, and a change of control for the world's largest label won't pass unnoticed.
For Ackman, this represents his highest-conviction bet since his massive long position in Chipotle years ago. He's been publicly bullish on streaming music economics for years, arguing that the industry's shift to subscriptions creates durable, growing cash flows.
The premium is rich. But Ackman is betting UMG is worth far more than even his offer implies once it trades on a real exchange with real liquidity. Whether the board—and regulators—agree will determine if this deal closes by year-end as proposed.
UMG closed at 24.50 euros on Monday, up 19% but still below the 30.40 euro offer price—suggesting the market sees meaningful execution risk.