In a cash-and-stock deal worth over $64 billion, activist investor Bill Ackman’s Pershing Square Capital Management is proposing to buy Taylor Swift and Bad Bunny’s record label, Universal Music Group.
Under the planned agreement, Pershing Square SPARC Holdings, an acquisition firm authorized by the Securities and Exchange Commission in 2023, would merge with Universal Music.
The new business would be headquartered in Nevada, and its stock listing would be transferred from Amsterdam to the New York Stock Exchange.
Ackman said in a statement on Tuesday that “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 deal’s anticipated total cash and equity value is 30.40 euros per share, or $35.12. Based on its outstanding shares, Universal Music’s valuation is estimated to be around 56 billion euros.
For each share of Universal Music they possess, shareholders will receive 0.77 shares of the newly formed company’s equity and 9.4 billion euros in cash (or 5.05 euros per share).
According to Pershing Square, the proposed deal is expected to close before the end of the year.
Ackman turned down an offer in 2021 that would have given him a 10% share in Universal Music.
Ackman highlighted SEC enquiries at the time on whether the form of a special-purpose acquisition firm would permit such a purchase in accordance with New York Stock Exchange regulations.
During lunchtime trading in Amsterdam, Universal’s shares increased by over 10%.
