Bill Ackman’s acquisition proposal is rejected by Universal Music Group

The board of directors of Universal Music Group on Friday unanimously rejected an unsolicited acquisition proposal by Bill Ackman and his firm Pershing Square Capital Management. Saying it was not in the best interest of shareholders, artists or the company.

The board stated that after carefully considering Pershing Square’s proposal. They came to the conclusion that it «significantly undervalues» the music company and will not accelerate its expansion. Bollore, Universal’s biggest individual shareholder, had pushed for the board to turn down Ackman’s proposal.

Pershing Square declined to comment on the council’s decision.

In April, Pershing Square proposed a cash and stock offer through its acquisition vehicle. Valuing Universal Music at around 30.40 euros per share and putting the total value of the deal at 55.75 billion euros ($65.03 billion), according to Reuters calculations.

Universal Music Group’s stock price has lagged despite the music industry’s success, which Ackman claimed his plan would address.

The company is expected to move its stock listing from Amsterdam to New York City. Which would make it easier for more investors, including index funds. To own shares in the company and ultimately lead to higher profits and a higher valuation.

Ackman had already attempted to acquire Universal Music Group in 2021 through a joint venture operation designed to take a private company public. But abandoned the plan after regulatory scrutiny in the United States. Instead, Pershing Square became a major investor in UMG, and Ackman served on its board until last year.

“UMG has built an unmatched position in the music industry through clear vision and strong execution,” Universal Music Group Chairman Sherry Lansing said in a statement. “The board has full confidence in the ability of Sir Lucian and his team to deliver sustainable growth and continue to generate value for all stakeholders.”