TheBadPlacebing news | Bill Ackman thinks he’ll convince UMG shareholders to take his deal. JP Morgan isn’t so sure.
Bill Ackman’s Pershing Square has lodged an unsolicited, non‑binding cash‑and‑shares proposal to buy Universal Music Group (UMG) at a valuation of roughly $64 billion. The offer would give UMG shareholders €9.4 billion in cash plus 0.77 shares of a newly created “New UMG” for each share they hold. Pershing Square would fund about a quarter of the cash itself, while the balance would come from new investment‑grade debt and the sale of UMG’s €2.7 billion stake in Spotify. Ackman says the deal would also free up up to €750 million for UMG’s artists from the Spotify sale and could pave the way for a NYSE listing via Pershing Square’s SPARC vehicle.
The proposal hinges on the backing of Bolloré Group, which currently owns a 28 % stake in UMG, and the approval of UMG’s board led by Sir Lucian Grainge. While Ackman asserts “overwhelming shareholder support” and reports an encouraging response from Bolloré, JP Morgan analyst Daniel Kerven warned that Bolloré may not back the plan, noting there is nothing in Pershing’s offer that UMG could not achieve on its own with major shareholder support. Other analysts echoed the uncertainty: ING said the proposal raises “many valid points” but might fail, and Deutsche Bank called it “opportunistic and timely” but offered no prediction. Tencent, which holds about 20 % of UMG through a consortium, appears indifferent and was reportedly “out of the loop” before the announcement.
If the deal proceeds, Pershing Square would contribute €2.5 billion in cash, while €5.4 billion would be raised through debt and €1.5 billion would come from selling the Spotify stake. The financing structure means Pershing Square is putting up roughly a quarter of the cash, with the remainder financed externally and by liquidating an existing UMG asset. The transaction could open a window for other private‑equity firms—such as Blackstone and Apollo—to pursue UMG, which recently launched a €500 million share‑repurchase program citing a “meaningful dislocation” in its market valuation. UMG’s board has said it will review the proposal in line with its fiduciary duties but will not comment further until that review is complete.
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