Investor Bill Ackman’s Plan to Bring Universal Music Group Back to the U.S.

Investor Bill Ackman is determined to bring Universal Music Group (UMG) back to the United States, citing his contractual right to do so.

Centralizing Pershing Square Holdings

In a recent post, Ackman revealed his intention to centralize his company, Pershing Square Holdings, at the London Stock Exchange, and delist it from Amsterdam’s Euronext exchange. He stated, “Pershing Square has a contractual right to cause UMG to be listed in the U.S. We will exercise this right and achieve a U.S. listing for UMG by next year.”

Pershing Square’s Ownership of UMG

Pershing Square currently owns approximately 10 percent of UMG, the world’s largest music label. While UMG’s main office is in Santa Monica, it is headquartered in the Netherlands and has been listed on the Euronext exchange since its public offering in 2021.

Vivendi’s Involvement

Vivendi, a French media and telecom giant, previously owned UMG and spun it out in a deal.

Reasons for UMG’s Performance

Ackman highlighted that UMG currently trades at a discount to its intrinsic value, with limited liquidity, primarily due to its listing on Euronext and exclusion from major indices like the New York Stock Exchange and Nasdaq. Ackman aims to rectify this situation to enhance shareholder value.

UMG’s Potential U.S. Listing

In response to Pershing Square’s plans, a UMG spokesperson stated that Pershing can request a U.S. listing on the condition that a Pershing entity sells at least $500 million in UMG shares. However, UMG is not obligated to become a U.S. domiciled company or delist from Euronext Amsterdam.

Future Actions and Decisions

The spokesperson assured that UMG will comply in good faith with its obligations regarding the U.S. listing process at Pershing’s request. However, any further actions or decisions will prioritize value maximization and the best interests of all shareholders.

Recent Events in Amsterdam

Ackman’s decision to shift Pershing’s listing was influenced by recent events in Amsterdam, where Israeli soccer fans were attacked following a match. These incidents, deemed antisemitic, led to injuries and subsequent protests.

Combatting Antisemitism

Ackman, a vocal advocate against global antisemitism, has been actively involved in raising awareness and condemning such acts, including addressing incidents at his alma mater, Harvard.

Conclusion

In conclusion, Ackman’s efforts to bring UMG back to the U.S. reflect his commitment to enhancing shareholder value and addressing moral principles. By centralizing the listing at the London Stock Exchange, he aims to improve liquidity and protect minority populations.

FAQs

Q: What percentage of UMG does Pershing Square own?

A: Pershing Square currently owns approximately 10 percent of Universal Music Group.

Q: What motivated Ackman’s decision to shift Pershing’s listing?

A: Recent events in Amsterdam, particularly the antisemitic attacks on Israeli soccer fans, played a significant role in Ackman’s decision.

Credit: www.hollywoodreporter.com