1 month ago
Billionaire Bill Ackman’s hedge money has offered to bargain Universal Music Group (UMG) successful a woody that values nan world’s biggest euphony institution astatine much than €50bn (£44bn).
Pershing Square, nan New-York based hedge fund, has offered to bargain nan business, which is location to artists including Taylor Swift and Elton John, successful a rate and banal deal.
Ackman said successful a connection that while nan company, which is led by nan British-born Sir Lucian Grainge, had done “an fantabulous occupation nurturing and continuing to build a world-class creator roster and generating beardown business performance”, its stock value had lagged owing to issues “unrelated to nan capacity of its euphony business”.
Shares successful UMG, which person been listed successful Amsterdam since 2021, person mislaid much than a 4th of their worth successful nan past twelvemonth alone.
The institution is 1 of nan “big three” grounds labels, alongside Sony Music Entertainment and Warner Music Group. Its roster ranges from classical euphony to stars specified arsenic Adele, Drake and Ariana Grande.
Ackman blamed its mediocre stock value capacity partially connected nan hold of UMG’s listing successful nan US, underutilisation of its equilibrium expanse and uncertainty astir nan French conglomerate Bolloré Group’s 18% liking successful nan company.
He besides cited a “lack of investor credit” successful nan company’s valuation of its €2.7bn liking successful nan euphony streaming service, Spotify.
Pershing Square, which Ackman group up successful 2004, controls much than $26bn successful assets. The money bought a 10% liking successful UMG successful 2021.
While Ackman said Grainge and his guidance squad had done an “excellent job” astatine nan company, arsenic portion of nan projected woody nan hedge money would adhd Michael Ovitz, a seasoned talent agent, arsenic chair, arsenic good arsenic 2 representatives from Pershing Square to nan company’s board.
The woody would besides beryllium taxable to a “new employment statement and compensation statement for Sir Lucian Grainge”, Ackman said successful a missive to nan committee of board astatine UMG.
Grainge was paid a package of much than €41m past year. That included a €4.4m guidelines net and much than €30m successful bonuses.
Under nan projected deal, UMG would merge pinch a blank-cheque institution group up by Pershing Square, and past database connected nan New York Stock Exchange. Shareholders would person a full of €9.4bn successful rate and 0.77 shares successful nan caller institution for each Universal stock they own. Together, that would correspond a 78% premium compared pinch nan company’s closing stock value connected Thursday, Pershing said.
UMG was approached for comment.
