Activist investor Bill Ackman's Pershing Square Capital Management is offering to purchase Taylor Swift and Bad Bunny's music label, Universal Music Group, in a cash-and-stock transaction valued at approximately $64 billion.
The proposed deal would involve Universal Music merging with Pershing Square SPARC Holdings, an acquisition company approved by the Securities and Exchange Commission in 2023. Plans would include the new company being based in Nevada
and moving its stock listing from Amsterdam to the New York Stock Exchange.
“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,” Ackman said in a statement on Tuesday.
The total cash-and-stock value of the deal is estimated at 30.40 euros per share, or $35.12. That puts Universal Music's value at approximately 56 billion euros based on its outstanding shares.
Universal Music shareholders will receive 9.4 billion euros in cash (or 5.05 euros per share) and 0.77 shares of the newly created company's stock for each share of Universal Music that they own.
Universal Music did not immediately respond to a request for comment.
The proposed transaction is anticipated to close by the end of the year, according to Pershing Square.
In 2021 Ackman walked away from a deal that would have given him a 10% stake in Universal Music. At the time, Ackman cited questions from the SEC about whether the structure of a special-purpose acquisition company would allow such an acquisition under the rules of the New York Stock Exchange.
Shares of Universal rose more than 10% in midday trading in Amsterdam.
