Bill Ackman’s Pershing Square Capital has made a bold bid to acquire Universal Music Group, the world’s largest record label, in a deal valuing the company at roughly €55 billion. Financial Times reporting notes that the transaction would largely consist of stock, with Universal shareholders receiving €5.05 in cash per share and 0.77 shares in a new entity combining the label with Ackman’s blank-cheque company. The move would also relocate Universal’s listing from Amsterdam to New York, a strategy Ackman argues could unlock value and attract a broader investor base.
Universal, home to artists such as Taylor Swift and Kendrick Lamar, has seen its shares fall more than 30 percent over the past six months amid growing investor concern over artificial intelligence’s potential impact on copyright and profits. Following the announcement of Ackman’s proposal, shares rose 11.4 percent to just over €19.05, reflecting investor interest in the terms of the deal, which assumes additional value from Pershing’s earnings forecasts and a planned €1.5 billion sale of Universal’s stake in Spotify.
Ackman framed the offer as a solution to issues unrelated to Universal’s music business, claiming the company’s stock price had “languished” due to external factors. The deal would require approval from two-thirds of Universal shareholders voting at a meeting, a threshold Ackman expressed confidence in meeting. However, some industry experts, including Matt Pincus of a LionTree-backed fund, questioned the structure, likening it to the pandemic-era blank-cheque companies that often failed to deliver real value. Critics argue that most of the proposed premium exists on paper, contingent on the US listing and projected earnings, rather than immediate cash returns.
The position of Universal’s largest shareholder, the Bolloré Group, which holds 28 percent of the company including Vivendi’s 10 percent stake, is considered crucial. Ackman revealed that his first call regarding the proposal was to the French conglomerate, whose response he described as “music to our ears,” though he acknowledged that “the devil is in the details” and that Bolloré’s backing would be essential for any deal. Other shareholders agree with Ackman’s assessment of Universal’s challenges but suggest that a takeover is not the only way to address them.
Ackman has been involved with Universal for years, initially building a roughly 10 percent stake in 2021 ahead of its Amsterdam listing and joining the board as a vocal advocate for strategic changes. He has long argued that music rights provide “forever” cash flows, particularly in the streaming era, and has pushed for a US listing to improve liquidity and investor access. Despite leaving the board in 2025 and trimming his stake, Ackman has maintained that Universal remains undervalued, positioning Pershing Square as one of its largest investors.
The proposed merger would place former Disney president Michael Ovitz as chair and add two Pershing representatives to the board, while retaining Universal chief executive Sir Lucian Grainge, whose support for the proposal reportedly encouraged the submission of a formal bid. Other significant shareholders include Tencent with an 11.4 percent stake and Singapore’s GIC sovereign wealth fund holding nearly 5 percent. Pershing Square plans to contribute €2.5 billion in financing, including €1.05 billion from investors in Ackman’s blank-cheque vehicle Sparc Holdings, with the new Universal entity borrowing an additional €5.4 billion to fund the transaction.
Financial Times reporting emphasizes that the deal could serve multiple purposes: securing control of Universal, pushing through long-sought strategic changes such as the US listing, and taking advantage of perceived market mispricing in the face of AI-driven industry disruption. Ackman, known for making multibillion-dollar bets on high-quality companies with pricing power, manages nearly $18 billion in his main hedge fund and is currently pursuing an IPO for Pershing Square USA, which would offer investors exposure to both the new Universal entity and a portion of his hedge fund’s management company.
