Universal Music Group H Earnings Surge 38% Year-Over-Year

William Ackman’s Pershing Square Acquires 7.% of Universal Music

Billionaire hedge-fund manager William Ackman has officially acquired over seven percent of Vivendi’s Universal Music Group via his Pershing Square Holdings (LON: PSH) investment company, with an option to up the stake to 0 percent during the next month. 

Ackman’s interest in owning a piece of Universal Music Group – which reported a 38 percent year-over-year revenue boost through 202’s first half – came to light in early June. The 55-year-old originally intended to purchase 0 percent of the Big Three record label via his special-purpose acquisition company, Pershing Square Tontine Holdings (NYSE: PSTH), and it appeared for a time that the deal would close.

However, the proposed investment fell through towards July’s end, with the Pershing Square Capital Management founder Ackman citing “issues raised by the SEC with several elements of the proposed transaction” as one of the development’s chief causes. Despite Ackman’s clear-cut praise of Universal Music’s business model and future, it also bears mentioning that PSTH investors appeared wary of the UMG deal for multiple reasons. During the last six months, the SPAC’s stock price has dipped by nearly 33 percent, with a current per-share price of $20.2.

Now, as initially mentioned, William Ackman and London-based Pershing Square Holdings are set to acquire one-tenth of the stock market-bound Universal Music Group after all, Vivendi announced in a formal release this afternoon.

According to the French conglomerate’s concise release, Pershing Square (and Ackman-managed “affiliates”) today bought 7. percent of Universal Music Group for $2.8 billion, at an enterprise valuation (including existing debt) of €35 billion ($4.02 billion at the present exchange rate) for the entirety of the leading record label. The deal specifically encompasses 28,555,07 ordinary UMG shares priced at $2.78 apiece, with Pershing Square’s “cash consideration” totaling $2.5 billion or so.

The buyers have the right to increase their UMG stake to an even 0 percent (at the same price) by Thursday, September 9th, and Pershing Square higher-ups intend to do so, per Vivendi.  

As noted, Universal Music Group is scheduled to arrive on the Euronext Amsterdam on Tuesday, September 2st, with 60 percent of the company becoming available to public investors. Pershing Square will own another tenth, assuming that the transaction involving the remainder of the stake closes, while Chinese conglomerate Tencent currently owns 20 percent of the business. Vivendi expects to retain the remaining 0 percent interest in UMG.

Reports recently revealed that Universal Music Group had launched a formal investigation following toxic-workplace allegations made by current and former employees at its Australian division, and UMG late last month inked a high-profile licensing deal with TikTok rival Lomotif.

Chris
Featured PRO Seeking Example
Chris Cornell
Instruments
12 String Guitar
Acoustic Guitar
Classical Guitar
Rhythm Guitar
Vocals (Backing)
Vocals (Baritone)
Vocals (Lead)
Vocals (Singer)
Vocals (Tenor)
PRO
Todd West
Instruments
Rhythm Guitar
Vocals (Backing)
Vocals (Baritone)
Vocals (Lead)
Vocals (Singer)
Vocals (Tenor)
PRO
Nina Lewis
Instruments
Vocals (Alto)
Vocals (Backing)
Vocals (Lead)
Vocals (Singer)
PRO
Sydney Hiralez
Instruments
Keyboard
Vocals (Mezzo-Soprano)
Vocals (Singer)
PRO Seeking
Colin Boyd
Instruments
Acoustic Guitar
Electric Guitar
Rhythm Guitar
Vocals (Backing)
Vocals (Lead)
PRO
Napalm Amin
Instruments
Vocals (Bass)
0:00
0:00