Billionaire investor Ackman makes $64bn bid for Universal Music Group

Universal Music, the label behind superstars Taylor Swift and Bad Bunny, is expected to list in NY from Amsterdam.

Billionaire investor Bill Ackman’s Pershing Square has proposed a takeover of Universal Music Group in a $64bn deal, the latest twist in his nearly five-year quest for the music label giant.

Universal Music Group (UMG) – the company behind international superstars, including Taylor Swift, Billie Eilish and Kendrick Lamar – is expected to move its listing to New York from Amsterdam, paving the way for more investors, including index funds, to own the company and ultimately lead to more robust earnings and a higher valuation.

Universal Music declined a Reuters news agency request for comment.

For Ackman, one of the world’s most voluble investors, who cemented his fame and fortune as an activist investor, forcefully pushing corporate America to adopt changes, this is a far friendlier approach, investors and industry analysts said.

Ackman’s letter to Universal Music Group’s board carried a mixed tone, at times complimentary of current management, led by chairman and chief executive Lucian Grainge, and critical of the company’s “underutilized balance sheet” and handling of its 2.7 billion euro ($3.1bn) investment in Spotify Technology.

Ackman first flirted with Universal Music Group in 2021, when his Pershing Square Tontine Holdings, a shell corporation created to take a private company public, zeroed in on its target.

But Ackman shelved the complex deal in the wake of heavy US regulatory scrutiny.

Instead, Pershing Square became one of UMG’s biggest investors in 2021, and Ackman sat on its board until last year.

Post transaction, Ackman said Grainge should remain Universal Music’s chief executive.

Ackman said he and former Hollywood super-agent Michael Ovitz met with Grainge over dinner “a couple of weeks ago” to discuss the potential merger.

“Lucian encouraged us to send it in,” Ackman said.

Ackman proposed adding new directors, including Ovitz – who shepherded the careers of Madonna and Michael Jackson – who would become the board chair.

Additionally, two representatives from Pershing Square would get seats, he said, not saying yet whether he would be one of the directors.

One survey last year found that a staggering 97 percent of listeners could distinguish between AI-generated and human-composed songs.

Under Tuesday’s proposal, Pershing’s SPARC Holdings would merge with UMG, and the new entity would become a Nevada corporation listed on the New York Stock Exchange.