Pershing Square Capital Management has made a formal, non-binding proposal to acquire Universal Music Group (UMG) at a valuation of about €30.40 per share, the hedge fund said on Tuesday. The price reflects a 78% premium relative to UMG’s prevailing stock price, according to the proposal terms disclosed by Pershing Square.
Under the terms offered, UMG shareholders would receive a combination of cash and equity: €5.05 in cash plus 0.77 shares in a newly listed entity for each UMG share held. Pershing Square said the deal would be implemented through a merger with Pershing Square SPARC Holdings, which would result in the music company becoming a U.S.-listed company on the New York Stock Exchange.
The proposal, led by Bill Ackman’s Pershing Square, noted several transaction mechanics. Pershing Square stated it has secured financing commitments to back the proposed purchase and indicated an expectation that the transaction could close by year-end. The plan also calls for the cancellation of about 17% of UMG’s shares as part of the reorganization.
Pershing Square characterized its offer as non-binding, signaling the proposal is subject to due diligence, negotiation and any required approvals. The combination of a cash component and an equity stake in a newly listed U.S. vehicle means UMG shareholders would receive immediate liquidity as well as a continuing interest in the combined entity should the transaction proceed.
Key logistical elements cited in the proposal include the use of Pershing Square SPARC Holdings as the merger vehicle and the subsequent listing on the New York Stock Exchange. Pershing Square’s announcement did not provide additional operational or strategic details about how the newly listed company would be managed following the merger.
The proposal’s timeline target - completion by the end of the current year - sets a clear expectation for the pace of negotiations and any regulatory or shareholder processes that would be required to finalize the deal. Pershing Square’s statement emphasized that financing commitments have been obtained, without specifying the providers or the structure of that financing.
No other changes to UMG’s governance, operations or long-term strategy were detailed in the proposal as disclosed. The non-binding nature of the submission means that the terms could change as the parties move through due diligence and the negotiation process.