Bill Ackman’s Pershing Square plans to take over Universal Music Group (UMG) in a $64 billion (£48.4 billion) cash and shares deal.
Ackman said Universal Music’s share price has ‘languished’ due to a range of issues the merger would address.
| Universal Music Group | Share price: €19.4 (+13.3%) |
| Market cap: €31.4bn | PE: 19.3 |
Amsterdam-listed shares in the world’s biggest music company, whose artists includes Taylor Swift and Lady Gaga, surged on the news.
As at 31 December 2025, Universal Music represented 13% of the net asset value (NAV) of Pershing Square Holdings (PSH). This is Pershing Square Capital Management’s flagship fund listed in London.
About the deal
Pershing Square Capital Management has submitted a ‘non-binding proposal’ to buy Universal Music in a €55.8 billion deal. Universal Music will merge with Pershing Square SPARC Holdings to become a new, New York Stock Exchange-listed company.
Pitched at €30.40 per share, a 78% premium to Universal Music’s undisturbed share price, the deal is expected to close by the end of 2026. In addition to €9.4 billion in cash, shareholders will receive 0.77 shares in ‘New UMG’ stock for each Universal Music share they own.
World-class roster
‘Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,’ said Pershing Square CEO Ackman.
‘However, 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.’
The premise of the deal is that external factors, rather than business performance, have dragged on Univeral Music’s share price. These include the postponement of its US listing, ‘suboptimal’ shareholder engagement and uncertainty surrounding Bollore Group’s 18% stake.
Emulating Berkshire
As for London-listed Pershing Square Holdings, this trust offers investors exposure to a highly concentrated portfolio of companies. Its carefully curated holdings include Amazon (AMZN), Meta (META) and Restaurant Brands (QSR).
Another position is property developer Howard Hughes (HHH). Last year, Pershing Square subscribed $900 million for new shares as part of a strategy to turn Howard Hughes into a diversified holding company.
Warren Buffett devotee Ackman aims to set up Howard Hughes as a reincarnation of Berkshire Hathaway (BRK.B).
Pershing Square Holdings currently trades on a wide 25% share price discount to NAV for a variety of reasons. These include high fees and the poor transparency for its highly concentrated portfolio, whose returns can be significantly impacted by one holding.
The complexity of the hedges employed by the manager is also off-putting for some investors.
The Winterflood view
‘Pershing Square can be accused of many things, but not inertia,’ said Winterflood’s Shavar Halberstadt.
‘The fund’s recent annual report characterized the prevailing Universal Music share price as a “very large discount to intrinsic value”, as the market did not appreciate recent progress made, with growth set to accelerate,’ added Halberstadt.
‘Perhaps increasing the allocation to this capital light (but low obsolescence) business is also sensible portfolio rebalancing, given the capital-intensive nature of newer holdings in Alphabet (GOOG), Amazon and Hertz (HTZ).’
Disclaimer: The author James Crux has a personal investment in Pershing Square Holdings.
Read the press release here: https://www.businesswire.com/news/home/20260406138476/en/Pershing-Square-Announces-Proposal-to-Universal-Music-Group-N.V.
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