Bill Ackman’s relationship with Universal Music Group just went from complicated to over. The billionaire investor plans to sell Pershing Square Capital Management’s stake in UMG after the music giant’s board rejected his takeover proposal, ending a multi-year saga that has seen Ackman go from board member to spurned suitor.
The rejected bid, submitted on April 7 and formally turned down on May 29, valued UMG at approximately $64-65 billion, or roughly €55.75 billion. That included a cash component of €5.05 per share and represented a 78% premium to UMG’s closing price on April 2. UMG’s board was unmoved, calling the offer fundamentally insufficient.
The deal that wasn’t
Ackman’s proposal was structured as a cash-and-stock deal designed to address what he viewed as a core problem: UMG’s persistently stagnant stock price on the Amsterdam exchange. Part of the financing plan involved selling UMG’s stake in Spotify, which would have helped fund the acquisition.
UMG’s board rejected the offer, stating it undervalued the company and failed to present a superior value creation strategy compared to what management already had in place. Cyrille Bolloré, a key UMG shareholder with deep ties to the company through the Vivendi legacy, strongly opposed the bid.
