Pershing Square Capital Management has proposed a merger with Universal Music Group, which would transfer the latter's public listing status to a US acquisition vehicle. The fund, led by Bill Ackman, stated that the deal values the world's largest music company at a 78% premium to its recent closing share price.
In a statement released on Tuesday, Pershing Square indicated that shareholders agreeing to the transaction would receive €9.4 billion ($10.8 billion), or €5.05 per share, plus 0.77 shares in the new company for each Universal Music share held. The transaction would merge Universal Music Group with Pershing Square SPARC Holdings, Ltd., a US Securities and Exchange Commission-registered acquisition company.
Pershing Square estimates the total offer value at €30.40 per share. Representatives for Universal Music Group and its major shareholder Vivendi SE declined to comment.
Shares of Universal Music Group rose 12% to €19.08 by 09:27 Amsterdam time, after earlier surging as much as 24%, marking their largest intraday gain since the company’s 2021 market debut. As of last week, the company’s market value had declined 26% over the past 12 months, closing at a market capitalization of €31.4 billion as of last Thursday.
Pershing Square noted that the new entity would shift its primary stock listing from the Amsterdam stock exchange to the New York Stock Exchange. The transaction would result in the cancellation of approximately 17% of Universal Music Group's outstanding shares.
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