Bill Ackman’s Pershing Square Capital Management submitted a non-binding proposal to Universal Music Group’s board on Tuesday (April 7) to acquire all outstanding shares in a cash-and-stock deal valued at approximately $64 billion. The offer prices UMG at €30.40 per share, a 78% premium to UMG’s April 2 closing price of €17.11, and would merge UMG with Pershing Square SPARC Holdings into a newly formed Nevada corporation, rebranded as “New UMG” and listed on the New York Stock Exchange.
The proposal is non-binding. UMG’s board has not approved it. Closing would require a two-thirds shareholder vote, regulatory sign-off, and a new employment contract for UMG CEO Sir Lucian Grainge. But the move landed hard regardless, sending UMG shares up 12% on Tuesday and prompting immediate attention across the music industry and Wall Street.
Ackman’s core argument is simple and hard to dispute: UMG’s stock has lost roughly 30% of its value over the past yeardespite operating the world’s largest and most valuable music business. He pins the underperformance on four structural issues, including uncertainty around Bolloré Group’s 18% stake, the postponement of UMG’s planned US listing, an underutilized balance sheet, and the absence of a disclosed capital allocation plan. None of these, he argues, reflect the quality of the underlying business.
Premium music catalog assets regularly trade at high-teens to 20-plus times EBITDA on the private market. UMG, ahead of Tuesday’s news, was valued at roughly 11 times its 2025 adjusted EBITDA. Ackman’s thesis is that the gap between those two numbers represents the opportunity.
Three details from Pershing Square’s letter to the board stand out.
First, this deal would finally unlock UMG’s Spotify stake. UMG has held equity in Spotify since the platform launched in 2008 and has never sold a share. Under Ackman’s proposal, UMG’s €2.7 billion Spotify position would be sold in the market or via a block transaction, with €1.5 billion in net proceeds used to fund the cash component of the bid. Crucially, artists would directly benefit: the letter commits up to €750 million ($866 million) in Spotify sale proceeds to UMG’s artists on a non-recoupable basis, honoring a 2018 commitment UMG made as part of a deal with Taylor Swift, who had publicly pushed the label to ensure any Spotify sale would result in artist distributions regardless of unrecouped advances.
Second, Ackman wants Michael Ovitz as UMG’s Chairman. Ovitz co-founded Creative Artists Agency in 1975, built it into the world’s leading talent agency, and later served as President of The Walt Disney Company. Ackman cites Ovitz’s 40-year relationship with Grainge as a key reason for the choice, framing the board refresh as continuity rather than disruption. Ovitz is currently a director of Pershing Square SPARC Holdings, the acquisition vehicle at the center of the deal.
Third, the valuation projections are striking. Ackman’s five-year model projects “New UMG” could be worth over $100 billion by 2031, compared to its $36 billion valuation last week. By year-end 2026, Pershing Square projects a share price of €32.90, nearly double UMG’s recent trading price. The mechanism is a shift away from UMG’s current policy of paying out 50% of net income as dividends, redirecting surplus free cash flow into share buybacks instead. Pershing Square estimates New UMG will generate approximately €15 billion in total cash over five years available for buybacks and acquisitions, roughly half the company’s entire current market cap.
A NYSE listing is central to the thesis. UMG currently trades on Euronext Amsterdam, limiting its investor base. A US listing would make UMG eligible for S&P 500 inclusion and open the company to a vastly larger pool of institutional capital. UMG delayed its planned US listing last month after a standoff with Pershing Square, a tension that now appears to have escalated into this full acquisition proposal.
The broader question is what Ackman’s move does to the market around UMG. Bolloré Group, sitting on 18% of the company, has its own calculations to make. Whether Blackstone, Apollo, or other deep-pocketed buyers now see a window remains to be seen. UMG has not commented. The path to closing is long. But the conversation about who owns the world’s largest music company just changed.
