Pershing Square launches takeover bid for Universal Music

U.S. hedge fund Pershing Square, led by activist investor Bill Ackman, announced Tuesday that it offered to buy Universal Music Group through a merger.

Pershing Square said its offer to Universal shareholders included $10.9 billion in cash, or 5.05 euros per share, plus 0.77 shares of the new entity for each UMG share.

According to AFP estimates, the merged company would boast a roster of top artists, including Taylor Swift, The Weeknd and Lady Gaga.

Following the merger with Pershing Square SPARC Holdings, an acquisitions company, the new entity would be listed on the New York Stock Exchange.

Pershing Square expects to close the deal by the end of 2026.

"UMG's stock price has languished due to a combination of issues that are unrelated to the performance of its music business," Ackman said in a statement.

The company pointed to uncertainty over French conglomerate Bolloré's plans for its 18% stake in Universal, a delayed IPO on the U.S. stock market and "underutilization of UMG's balance sheet" as some of the concerns that have held back the stock's performance.