Billionaire investor Bill Ackman has launched an ambitious bid to acquire Universal Music Group (UMG), the world’s largest music company, in a deal that would value the home to stars like Taylor Swift and Drake at more than €50 billion.
The non-binding proposal from his hedge fund, Pershing Square Capital Management, outlines a complex cash-and-stock transaction designed to take the music giant private before relisting it in New York. The move represents a massive bet on the intrinsic value of a business whose share price, Ackman argues, has been unfairly depressed for reasons unrelated to its core performance.
The Premium Offer
In a letter to the UMG board, Ackman detailed an offer that would see shareholders receive €9.4 billion in cash, equivalent to €5.05 per share, plus 0.77 shares in a new entity for every UMG share they own. Pershing Square stated this total package values UMG shares at approximately €30.40 each—a substantial 78% premium to the price at which the stock closed on 2 April 2026.
To execute the deal, Pershing Square plans to merge UMG with a special-purpose acquisition company (SPAC) it controls, called Pershing Square SPARC Holdings, Ltd. The combined company would be incorporated in Nevada and list on the New York Stock Exchange. Ackman’s fund, which already owns a 10% stake in UMG acquired in 2021, believes this structure will allow the music group to adopt US accounting standards and become eligible for inclusion in major indices like the S&P 500.
The Share Price Puzzle
The central rationale for the bid, as laid out by Ackman, is a persistent and puzzling disconnect between UMG’s operational strength and its market valuation. Despite what he called an “excellent job” by the British-born chief executive Sir Lucian Grainge in building a “world-class artist roster” and generating strong business performance, UMG’s shares have significantly underperformed.
Listed on the Euronext Amsterdam exchange in September 2021 with a reference price of €18.50, the stock has lost more than a quarter of its value in the past year alone. Its performance in 2026 had fallen by 24.55% year-to-date prior to the offer, trading within a 52-week range of €15.41 to €28.48.
Ackman and Pershing Square attribute this lag to several specific factors. Chief among them is the uncertainty surrounding the substantial stake held by the French conglomerate Bolloré Group, which directly owns approximately 18.5% of UMG and wields significant influence. Through various entities, the Bolloré family controls around 30% of Vivendi SE’s share capital, and Vivendi itself retains a 13.43% stake in UMG with strong voting rights. The July 2025 resignation of Cyrille Bolloré from UMG’s board added to this atmosphere of unpredictability.
Other cited reasons include the delayed listing of UMG in the United States, what Pershing Square calls an underutilised balance sheet, and a lack of a clear, disclosed capital allocation plan. The hedge fund also pointed to a “lack of investor credit” given to UMG’s €2.7 billion stake in the streaming service Spotify. As of November 2024, that holding amounted to a 3.27% stake worth approximately $3.01 billion, but the market has not fully reflected this asset in UMG’s valuation, according to Ackman.
This disconnect persists even as UMG maintains its dominance in the global music market. In 2024, it held a 31.7% share of recorded music, ahead of Sony Music Group’s 21.7% and Warner Music Group’s 15.3%. Financially, the company reported full-year 2025 revenue of €12.5 billion, up 5.7% year-on-year, with adjusted EBITDA rising 5.6% to €2.81 billion.
Management and Deal Structure
As part of the proposed takeover, Pershing Square intends to implement significant governance changes. While praising Sir Lucian Grainge’s leadership, the hedge fund plans to install veteran talent agent Michael Ovitz as chairman of the board and add two Pershing Square representatives as directors. The deal would also be conditional on agreeing a “new employment contract and compensation arrangement” for Grainge.
Grainge, who had his contract extended until May 2028 in March 2023, received a total package worth more than €41 million last year. His revised compensation structure now includes a $5 million base salary and a target annual bonus of $10 million, with a greater emphasis on equity and performance-based objectives.
The proposed transaction, which Pershing Square hopes to complete by the end of 2026, would also need to navigate the interests of other major shareholders. Alongside the Bolloré Group and Vivendi, the Chinese technology giant Tencent holds a 20% stake in UMG, acquired in 2020 and 2021.
Universal Music Group has been approached for comment on the offer.
