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Universal Music shares surge as Pershing Square tables €55bn bid
(Sharecast News) - US hedge fund Pershing Square has offered to buy Universal Music Group in a cash and stock deal valuing the company at around €55bn and sending its stock soaring on Tuesday.
Shareholders will receive a total of €9.4bn in cash and 0.77 shares of new stock for each UMG share held. The total deal is valued at around €30.40 a share with UMG stock up more than 11% in Amsterdam.
UMG will form a newly merged company with Pershing Square and list on the New York Stock Exchange, according to terms published by the Bill Ackman-owned fund.
"Since UMG's listing, Sir Lucian Grainge and the company's management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance," billionaire Ackman said in a statement.
"However, UMG's stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction."
The company which has Lady Gaga and Taylor Swift among the artists on its roster, was listed on the Euronext Amsterdam stock exchange in 2021 with an initial valuation of €46bn.
UMG was spun out of French media group Vivendi, with controlling shareholder Vincent Bollore retaining a stake worth around €5.9bn. Ackman cited uncertainty surrounding Bollore Group's 18% stake in the company, the postponement of its US listing, and "suboptimal" shareholder communications and engagement as reasons for his move.
Reporting by Frank Prenesti for Sharecast.com
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