Shares of Universal Music Group rose on Tuesday after Pershing Square proposed a takeover valued at about $64 billion. The investment firm, led by Bill Ackman, said it plans to acquire the company through a combined cash-and-stock deal worth €55.8 billion.
Under the proposal, shareholders would receive €9.4 billion in cash and 0.77 shares in a newly formed company for each share held. The offer values Universal Music at €30.4 per share, a 78 percent premium to its closing price on April 2.
Universal Music shares rose about 11 percent following the announcement. However, the stock remains down for the year so far.
Pershing Square said the company’s share price has underperformed due to factors unrelated to its core business, including uncertainty around Bolloré Group’s stake, delays in a U.S. listing, and limited shareholder engagement.
The firm said these issues could be addressed through the proposed transaction.
The deal includes plans to merge Universal Music with Pershing Square and list the combined entity on the New York Stock Exchange.
Pershing Square has also proposed changes to the company’s board, including appointing Michael Ovitz as chairman, along with additional board representation.
The proposal is subject to a new employment and compensation agreement for CEO Lucian Grainge.
Universal Music was spun off from Vivendi and listed on Euronext Amsterdam in 2021.
The proposed transaction is expected to close by the end of the year, subject to approvals.
