Pershing Square Proposes 55B Euro Acquisition of Universal Music

Pershing Square Capital Management, the investment firm led by billionaire Bill Ackman, has submitted a nonbinding proposal to acquire all outstanding shares of Universal Music Group, the world's largest music company, in a cash-and-stock deal valued at approximately 55 billion euros.

The proposal, announced on Tuesday, would merge Universal with Pershing Square SPARC Holdings, a newly formed entity, creating a Nevada corporation listed on the New York Stock Exchange. Under the terms, Universal shareholders would receive 5.05 U.S. dollars in cash and 0.77 shares in the new company for each Universal share held, equating to a total consideration of about 30.40 euros per share. This represents a 78 percent premium over Universal's closing price of around 17 euros on April 2. Pershing Square, which has held a stake in Universal since acquiring about 10 percent from Vivendi in 2021, estimates the transaction could close by the end of the year. The deal includes 9.4 billion dollars in cash and would cancel 17 percent of Universal's outstanding shares, leaving the combined entity with 1.541 billion shares while maintaining its investment-grade balance sheet.