Universal Music rejects takeover bid from Pershing Square
NEW YORK, United States — Entertainment giant Universal Music Group (UMG) on Friday rejected an investment and restructuring proposal from US hedge fund Pershing Square put forward in early April.
The bid by activist investor Bill Ackman would have increased Pershing Square's stake in the music label, home to Taylor Swift, Bad Bunny, The Weeknd and Sting, to just under 30%, according to a calculation by AFP.
The US fund had proposed to offer UMG shareholders either a combination of shares in a new company, Pershing Square SPARC, and cash, or $22 per share in cash.
After the merger, the new entity would be listed on the New York Stock Exchange.
"UMG's stock price has languished due to a combination of issues that are unrelated to the performance of its music business," Ackman said in a statement when the bid was announced.
The statement pointed to uncertainty about French conglomerate Bollore's plans for its 18% stake in Universal, a delay in listing on the US stock market, and "underutilization of UMG's balance sheet" among concerns that have held back the shares' performance.
Pershing Square bought 10% of UMG from the French media giant Vivendi, also owned by Bollore, in August 2021. But Pershing now holds only about 4.7%, according to UMG's latest annual report.
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