{"id":254771,"date":"2026-04-08T21:58:18","date_gmt":"2026-04-08T20:58:18","guid":{"rendered":"https:\/\/www.musicbusinessworldwide.com\/?p=254771"},"modified":"2026-04-08T23:27:21","modified_gmt":"2026-04-08T22:27:21","slug":"bill-ackman-thinks-hell-convince-umg-shareholders-to-take-his-deal-jp-morgan-isnt-so-sure","status":"publish","type":"post","link":"https:\/\/www.musicbusinessworldwide.com\/bill-ackman-thinks-hell-convince-umg-shareholders-to-take-his-deal-jp-morgan-isnt-so-sure\/","title":{"rendered":"Bill Ackman thinks he’ll convince UMG shareholders to take his deal. JP Morgan isn’t so sure."},"content":{"rendered":"

Universal Music Group<\/strong> confirmed on Tuesday (April 7) that its board received an unsolicited, non-binding proposal from Bill Ackman<\/strong>‘s Pershing Square<\/strong> \u2014 a cash-and-shares offer that values the world’s largest music rights company at approximately USD $64 billion<\/strong>.<\/a><\/p>\n

According to UMG<\/strong>‘s statement, its board will review the proposal “in accordance with [our] fiduciary duties” and analyze its implications for shareholders, employees, artists, and songwriters.<\/p>\n

“The Board of Directors has complete confidence in UMG’s strategy and the leadership of Sir Lucian Grainge<\/strong> and the Company’s management team. UMG will have no further comment on the proposal until the Board of Directors completes its review,” said UMG<\/strong>.<\/p>\n

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Speaking to investors<\/a> on Tuesday, Ackman<\/strong> was candid about the need to secure support from Bollor\u00e9 Group<\/strong>, which controls 28%<\/strong> of UMG<\/strong> via both a direct stake in the music company, plus its holding in Vivendi<\/strong>.<\/p>\n

“Without Bollor\u00e9, we don’t have a transaction,” Ackman<\/strong> said \u2014 but added that he expects “overwhelming shareholder support” for the deal.<\/p>\n

Not everyone is so convinced.<\/p>\n

In a research note circulated on Tuesday, JP Morgan<\/strong> analyst Daniel Kerven<\/strong> \u2014 a long-time follower of UMG<\/strong> and its previous owner, Vivendi<\/strong> \u2014 said he would “be surprised” if Bollor\u00e9<\/strong> supported the proposal.<\/p>\n

Kerven<\/strong> noted that there is “nothing in Pershing’s proposal that UMG could not do itself if it had the support of its major shareholders and the board.”<\/p>\n

“We are skeptical as to whether Bollor\u00e9 would support the proposal. There is nothing in Pershing\u2019s proposal that UMG could not do itself if it had the support of its major shareholders and the board.”<\/p>\n

Daniel Kerven, JP Morgan<\/span><\/p><\/blockquote>\n

The key question, according to Kerven<\/strong>, is whether Bollor\u00e9\/Vivendi<\/strong> “wants or needs the cash, sees better investment opportunities elsewhere and is willing to sell very undervalued UMG shares at a discount to their intrinsic value and dilute its potential upside.”<\/p>\n

In Kerven<\/strong>‘s view, Bollor\u00e9<\/strong> already has access to the funds it needs to achieve its strategic priorities \u2014 which likely center on buying out minority shareholders of assets across the Bollor\u00e9 Group<\/strong> to consolidate economic ownership.<\/p>\n

<\/div> <\/div> \n

Kerven<\/strong> is not alone in his skepticism over Ackman<\/strong>‘s plan for UMG<\/strong>.<\/p>\n

In a Reuters<\/em> survey of analyst reaction<\/a>, ING<\/strong> analysts said on Tuesday that while Pershing<\/strong>‘s proposal raised “many valid points” on shortcomings troubling UMG<\/strong>, the deal “might well fail.”<\/p>\n

Deutsche Bank<\/strong> analysts called the offer “opportunistic and timely” given UMG<\/strong>‘s share price underperformance, but offered no prediction on whether Pershing Square<\/strong> would secure Bollor\u00e9<\/strong>‘s backing.<\/p>\n

<\/div> <\/div> \n

While Ackman<\/strong>‘s proposal provides a pathway to NYSE<\/strong> inclusion via a merger with Pershing Square SPARC Holdings, Kerven<\/strong> noted that Bollor\u00e9\/Vivendi\/UMG<\/strong> have been “reluctant to have a US domicile and listing in the past.”<\/p>\n

A further wrinkle: Tencent<\/strong>, which holds approximately 20%<\/strong> of UMG<\/strong> via a consortium, may also prefer to maintain UMG’s current European<\/strong> listing.<\/p>\n

Sources close to the Chinese company tell MBW<\/strong> that Tencent<\/strong> was “out of the loop” ahead of Pershing<\/strong>‘s announcement, despite Ackman<\/strong> later revealing that he pre-briefed UMG<\/strong> and Vincent Bollor\u00e9<\/strong>.<\/p>\n

For his part, Ackman<\/strong> described Bollor\u00e9<\/strong>‘s initial response as encouraging. “I guess the words I got back were, ‘these are music to my ears,'” he said in an investor presentation<\/a> yesterday.<\/p>\n

Ackman<\/strong> also acknowledged that the deal needs the backing of UMG<\/strong> Chairman and CEO Sir Lucian Grainge<\/strong>. “We need board approval from Universal Music. We need the support, ultimately, I think, of Lucian [and] the management team,” he said.<\/p>\n

\n
Where is the money coming from?<\/h6>\n

Under the terms of the offer<\/a>, UMG<\/strong> shareholders would receive EUR \u20ac9.4 billion<\/strong> in cash,\u00a0plus 0.77<\/strong> shares of a newly created company (“New UMG”) for each share held.<\/p>\n

The \u20ac9.4 billion<\/strong> cash component would be funded from three sources: (i) \u20ac2.5 billion<\/strong> from Pershing Square<\/strong> itself (including \u20ac1.05 billion<\/strong> from its SPARC<\/strong> vehicle’s rights holders); (ii) \u20ac5.4 billion<\/strong> in new investment-grade debt loaded onto the combined entity; and (iii) approximately \u20ac1.5 billion<\/strong> in net proceeds from the sale of UMG<\/strong>‘s \u20ac2.7 billion<\/strong> stake in Spotify<\/strong>.<\/p>\n

In other words: Pershing Square<\/strong> is putting up roughly a quarter of the cash itself; the rest would come from borrowing and from liquidating an asset UMG<\/strong> already owns.<\/p>\n

UMG<\/strong>‘s artists would receive up to \u20ac750 million<\/strong> ($866 million<\/strong>) from that Spotify<\/strong> sale under Ackman<\/strong>‘s plan.<\/p>\n

As MBW<\/em> noted<\/a> on Tuesday, Ackman<\/strong>‘s move raises the question of whether other parties \u2014 including\u00a0Blackstone<\/strong>\u00a0and\u00a0Apollo<\/strong>, which\u00a0have committed billions to music assets in recent years \u2014 may now see a window to pursue UMG<\/strong> at what many in the industry consider a depressed public valuation.<\/p>\n

The offer comes as UMG<\/strong> last week kicked off<\/a> its \u20ac500 million<\/strong> ($579m) share repurchase program, with Chief Financial Officer Matt Ellis<\/strong> noting: “We currently see a meaningful dislocation in UMG’s market valuation.”<\/p>\n","protected":false},"excerpt":{"rendered":"

The music giant said it will review the proposal and analyze its implications for shareholders, employees, artists and songwriters. <\/p>\n","protected":false},"author":38,"featured_media":216732,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[131060,131061,2890,269],"class_list":["post-254771","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bill-ackman","tag-pershing-square","tag-umg","tag-universal-music-group"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/254771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/users\/38"}],"replies":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/comments?post=254771"}],"version-history":[{"count":5,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/254771\/revisions"}],"predecessor-version":[{"id":254844,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/posts\/254771\/revisions\/254844"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media\/216732"}],"wp:attachment":[{"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/media?parent=254771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/categories?post=254771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.musicbusinessworldwide.com\/wp-json\/wp\/v2\/tags?post=254771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}