\n<\/p>\n
(Corrects paragraphs 8 and 10 to say new entity will become a Nevada corporation, not named Nevada Corporation)<\/p>\n
April 7 (Reuters) – Bill Ackman’s Pershing Square on Tuesday proposed merging its acquisition vehicle with Universal \u200cMusic Group with a plan to list in the United States in a deal aimed at \u200creviving the world’s biggest music label’s value.<\/p>\n
Pershing Square’s cash-and-shares offer values Universal Music at around 30.40 euros per share, representing a 78% premium to \u200blast close price at 17.10 euros and making the deal worth 55.75 billion euros ($64.31 billion), according to Reuters calculation.<\/p>\n
Universal Music Group – the company behind recording artists including Taylor Swift, Billie Eilish and Drake – did not immediately respond to a request for comment.<\/p>\n
The Amsterdam-listed entertainment company’s shares jumped around 13% in the early trading on Tuesday, while top shareholder Bollore Group’s were \u200cup 6%.<\/p>\n
PERSHING HOPES NEW YORK LISTING WILL \u2060BOOST UMG SHARES<\/p>\n
Pershing’s move comes after UMG last month delayed a plan for a U.S. listing, walking back on an agreement with Pershing, which had exercised its right to request \u2060a U.S. offering and had argued a New York listing would boost UMG’s share price and liquidity.<\/p>\n
In a letter to UMG directors, Ackman said its management had done an “excellent” job of running a strong business and strategic execution, but its share price \u200bhas \u200blanguished since its listing in 2021.<\/p>\n
He blamed uncertainty over the 18% \u200bstake held by Bollore Group, the delay to \u200cthe planned U.S. listing and underutilisation of its balance sheet, among other things.<\/p>\n
Under Tuesday’s non-binding proposal, Pershing’s SPARC Holdings would merge with UMG and the new entity would become a Nevada corporation listed on the New York Stock Exchange.<\/p>\n
Talent agent and former Walt Disney Company president Michael Ovitz would join the UMG board as chairman, Pershing Square said.<\/p>\n
Pershing Square said that under the transaction UMG shareholders would receive a total of 9.4 billion euros in cash and \u200c0.77 shares in the new company for every share held in \u200bUMG.<\/p>\n
The cash portion of the new proposed deal would be funded by \u200bPershing from its SPARC’s rights holders, debt, and \u200bnet proceeds from the company’s stake in Spotify, it said.<\/p>\n
Bollore Group did not immediately respond \u200cto a request for comment.<\/p>\n
A spokesperson for Vivendi, which \u200bis UMG’s second-largest shareholder, did \u200bnot comment on the proposal.<\/p>\n
Tencent Holdings, UMG’s third-biggest shareholder, did not immediately respond to a request for a comment.<\/p>\n<\/p><\/div>\n