Bill Ackman’s Pershing Square offers to buy Universal Music for nearly $65 billion: Report

Pershing Square Capital Management has proposed a combination with Universal Music Group NV that would move the listing to a US-based buyout vehicle in a deal that Bill Ackman’s fund says would value the world’s largest music company at a 78% premium to its last closing price.

Pershing Square said Tuesday that shareholders who accept the deal will receive 9.4 billion euros ($10.8 billion), or 5.05 euros per share, plus 0.77 shares of the new company for every share Universal Music owns. The Firm acquired UMG through Pershing Square SPARC Holdings, Ltd., an SEC-registered buyout company. will combine with .

Pershing Square estimated the offer was valued at €30.40 per share. Representatives for UMG and major shareholder Vivendi SE declined to comment.

Ackman is proposing changes to the record label, which represents artists such as Taylor Swift and Drake, after shares plummeted. Ackman, worth about $8.1 billion according to the Bloomberg Billionaires Index, is one of the most well-known and influential activist investors. He has argued with UMG management over the past few years and pushed for a U.S. listing to boost the valuation of the company’s shares.

“UMG’s stock price has been weakened by a number of issues unrelated to the performance of its music business, and more importantly, they can all be resolved by this transaction,” said Pershing Square Chief Executive Bill Ackman.

UMG shares closed at €17.11 on Thursday. The company lost 26% of its market value in the last 12 months, making it worth €31.4 billion.

Bolloré SE, controlled by French billionaire Vincent Bolloré, is UMG’s largest shareholder with an 18.5% stake, while media conglomerate Vivendi, also controlled by the family, has a 10% stake.

Nicolas Marmurek, an analyst at mergers and acquisitions specialists Square Global, said in a note that unless Bolloré supported the move, “the bid looked dead from the start.” “We doubt Bolloré would agree to these terms, and if Bolloré were on board, he would recommend the transaction. This is a move by Pershing Square to put the offer in front of shareholders.”

Ackman resigned from the Universal Music Group board last year, citing other commitments.

Pershing Square said the new company will shift its primary stock listing from Amsterdam to the New York Stock Exchange. The deal will cancel approximately 17% of UMG’s shares.