Activist investor Pershing Square Capital Management, led by Bill Ackman, proposed a cash-and-stock transaction to acquire Universal Music Group (UMG) valued at approximately €55.8 billion ($64.4 billion). UMG’s board of directors subsequently rejected the proposal, stating the offer materially undervalued the company.
Transaction Proposal
On April 7, 2025, Pershing Square announced a non-binding proposal to acquire all outstanding shares of UMG. Under the proposed terms, UMG shareholders would receive €5.05 per share in cash and 0.77 shares of the newly formed company’s stock for each UMG share they held. The total offer was valued at €30.40 ($35.12) per share, representing a 78% premium to UMG’s closing share price on April 2, 2025.
The total offer represented a 78% premium to UMG’s closing share price on April 2, 2025.
The transaction would involve UMG merging with Pershing Square SPARC Holdings, a special-purpose acquisition company that received Securities and Exchange Commission (SEC) approval in 2023. Under the proposed structure, the new combined entity would be based in Nevada and transition its stock listing from Euronext Amsterdam to the New York Stock Exchange. Pershing Square had projected the transaction would conclude by the end of 2025.
Stakeholder Engagement
Ackman stated that his initial contact regarding the proposal was with the Bolloré Group, UMG’s largest single shareholder, which controls 28% of the company through direct holdings and its stake in Vivendi. He reported that Bolloré’s initial feedback was positive. The transaction was projected to generate approximately €2.7 billion in incremental cash for Bolloré while allowing it to retain its stake in UMG.
Ackman and Michael Ovitz, the proposed chairman of UMG’s new board, met with UMG Chairman and CEO Sir Lucian Grainge weeks prior to the formal submission. According to Ackman, Grainge encouraged the submission of the proposal for the company’s review. Ackman stated he did not expect opposition from Tencent, whose consortium holds approximately 20% of UMG, or other major shareholders.
Governance and Operational Plans
Ackman stated the proposal would not alter UMG’s operational structure and commended the existing management team. A condition of the transaction involved simplifying the employment contract of Sir Lucian Grainge.
The proposed new board of directors would include:
- Michael Ovitz as Chairman
- Two representatives from Pershing Square
- Additional members from UMG’s existing board
Ovitz, co-founder of Creative Artists Agency, has a reported 40-year relationship with Grainge.
Financial Outlook and Investor Relations
Pershing Square projected UMG would achieve annual earnings-per-share growth of 15% to 19% under the new plan, driven by high-single-digit revenue growth, margin expansion, and the cancellation of 17% of outstanding shares. Ackman compared UMG’s potential to Hilton Worldwide, which Pershing Square had previously invested in.
Pershing Square planned to enhance UMG’s investor communications. Jill Chapman, former head of investor relations at Hilton, joined Pershing Square to lead this initiative. Ackman noted that UMG’s historical communication style was more aligned with a private company.
Board Rejection and Share Sale
On May 29, 2025, UMG’s board of directors officially rejected the takeover proposal. The board stated it unanimously determined the offer was not in the best interests of UMG, its shareholders, artists, songwriters, employees, and other stakeholders. The board added that the proposal "fundamentally and materially undervalues UMG and will not deliver superior value creation."
"The price is not there at all," said Cyrille Bolloré, speaking at UMG’s annual shareholders meeting.
Cyrille Bolloré, speaking at UMG’s annual shareholders meeting, stated the Bolloré Group had urged the board to reject the offer, saying "the price is not there at all" and noting the offer was not using Ackman’s own money.
Following the proposal announcement, UMG shares rose by over 10% in midday trading in Amsterdam.
Background and Ackman’s UMG Stake History
Ackman withdrew from a previous deal in 2021 that would have granted Pershing Square a 10% stake in UMG at the time of its initial public offering. He cited inquiries from the SEC regarding whether the structure of a special-purpose acquisition company (SPAC) would comply with New York Stock Exchange regulations.
Pershing Square initially acquired approximately 10% of UMG from Vivendi in summer 2021 for about $4 billion. As of the end of 2023, its holding stood at 10.25%. In January 2025, Pershing distributed 47 million UMG shares (2.6% of the company) to co-investors during a fund wind-down, leaving it with 140 million shares (7.6%). In March 2025, it sold another 50 million shares (2.7%) for approximately $1.4 billion.
Following the rejection, reports emerged on an unspecified date that Pershing Square was preparing to sell approximately 80.6 million shares in UMG via an overnight placing through Bank of America, which could raise up to €1.5 billion. After the March 2025 sale, Pershing’s stake fell below 5%, and Ackman resigned from UMG’s board in May 2025, citing "new executive and board obligations."