Pershing Square suggests a $64 billion merger of Universal Music with a special acquisition company.

Bill Ackman’s Pershing Square proposed on Tuesday to merge its acquisition vehicle with Universal Music Group, with plans to list in the United States aimed at enhancing the value of the world’s largest music label.

Pershing Square’s cash-and-shares offer places a value of approximately 30.40 euros per share on Universal Music, signifying a 78% premium over the last closing price of 17.10 euros, making the deal valued at 55.75 billion euros ($64.31 billion), as per Reuters calculations.

Universal Music Group, which represents recording artists like Taylor Swift, Billie Eilish, and Drake, has not yet responded to a request for comment.
Shares of the Amsterdam-listed entertainment company surged about 13% in early trading on Tuesday, while shares of its top shareholder, Bolloré Group, rose by 6%.

In a letter to UMG directors, Ackman commended the management for executing a solid strategy and running a strong business, yet noted that the share price has remained stagnant since its 2021 listing.

He attributed this to uncertainty surrounding the 18% stake held by Bolloré Group, the delayed US listing, and the underutilization of its balance sheet, among other challenges.

According to Tuesday’s non-binding proposal, Pershing’s SPARC Holdings would merge with UMG, creating a new entity named Nevada Corporation, to be listed on the New York Stock Exchange.

Michael Ovitz, talent agent and former president of Walt Disney Company, will join the UMG board as chairman, as stated by Pershing Square.

Under the proposed transaction, UMG shareholders are set to receive a total of 9.4 billion euros in cash and 0.77 shares in Nevada for each share they hold in UMG.

This cash component of the deal will be financed by Pershing via its SPARC rights holders, debt, and net proceeds from the company’s position in Spotify, they confirmed.