Bill Ackman targets Taylor Swift and Drake’s label Universal Music in £48bn bid

Highlights

• Universal Music Group receives £48bn takeover offer from Pershing Square
• Bid led by Bill Ackman combines cash and stock
• Proposal includes plans for New York listing and board changes
• Share price jumps after offer despite recent decline

Ackman targets music giant with takeover proposal

Universal Music Group, home to artists including Taylor Swift, Drake and Adele, has received a £48bn takeover approach from Bill Ackman’s hedge fund Pershing Square.

The proposed deal, combining cash and shares, values the world’s largest music company at a significant premium. Ackman said the business had delivered strong performance under chief executive Lucian Grainge, but argued its share price had suffered for reasons unrelated to its core operations.

Shares in the company, listed in Amsterdam since 2021, have fallen sharply over the past year, though they rose by 11% following news of the bid.

Listing delays and investor concerns in focus

Ackman pointed to several factors behind the company’s weaker market performance, including delays to a planned US listing and what he described as underuse of its balance sheet.

He also highlighted uncertainty surrounding the stake held by the Bolloré Group, the company’s largest shareholder, as well as holdings linked to Vivendi.

Another issue raised was the market’s treatment of Universal’s £2.3bn stake in Spotify, which Ackman said had not been fully recognised in its valuation.

Universal is one of the industry’s “big three” labels alongside Sony Music Entertainment and Warner Music Group, with a roster spanning classical acts to major global stars.

Plan for New York listing and leadership changes

Under the proposal, Universal would merge with a special purpose acquisition company backed by Pershing Square and seek a listing on the New York Stock Exchange.

Shareholders would receive a mix of cash and shares in the new entity, representing a sizeable premium on the current valuation.

The plan also includes governance changes, with veteran talent agent Michael Ovitz set to become chair, alongside additional Pershing Square representatives on the board.

Ackman indicated that a revised contract and pay structure would be negotiated for Grainge, who received a total package exceeding £35m last year.

The offer now places pressure on major shareholders, with analysts suggesting Pershing Square will need to secure broad backing for the deal to proceed.