Following billionaire hedge fund investor Bill Ackman and his Pershing Square company’s announcement of a non-binding offer to buy Universal Music Group (UMG) on Tuesday (April 7), Ackman and other Pershing executives held a call to address analysts’ and shareholders’ questions.
The bid — an effort to revive UMG’s lagging stock price — involves a 9.4 billion euros ($10.85 billion) total cash, or 5.05 euros per share ($5.82), offer to shareholders. Pershing projects that by the end of the year (Dec. 31, 2026), UMG’s stock price will be 30.40 euros ($35) a share, which would value the company at more than $60 billion.
However, if shareholders choose to take all cash, they will get 22 euros a share — the equivalent of a nearly 29% premium from the stock’s April 2 closing price of 17.1 euros ($19.73). With about 1.833 billion shares outstanding, if all investors took the cash offer, the company’s valuation would be 40.34 billion euros ($46.5 billion).
Below are highlights from the call.
How likely is it that Pershing’s bid will succeed?
Pershing will need the support of two-thirds of shareholders who attend a shareholder meeting for its proposed offer to succeed. (No shareholder meeting has yet been called.) Much of UMG’s stock is concentrated in the hands of a handful of shareholders, including Bolloré Group, which altogether controls around 28%.
In July 2025, the chairman and head of Bolloré Group, Cyrille Bolloré, resigned from his seat on UMG’s board. At the time, French regulators had issued a decision with the potential to cause the Bolloré Group to “write a big check” to complete the acquisition of some companies it partially owned, Ackman said on the call. Bolloré’s unexpected resignation, which the company said would allow him to focus on other responsibilities, coincided with a decline in UMG’s stock price, as some in the market speculated that the Bolloré Group may sell some of its UMG holdings.
Ackman said he spoke to representatives of the Bolloré Group on Monday (April 7) and that they were intrigued by the offer: “The words I got back were, ‘These [words] are music to my ears.’”
Ackman said he expects the offer to get Tencent and other big UMG shareholders’ support, but that it can still succeed even if not all of those big shareholders vote in favor of it. The proposal also requires UMG board approval.
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Why did they disclose their offer to the public?
Ackman said near the beginning of his presentation that they publicly disclosed the offer to jump-start conversations with UMG shareholders.
Ackman’s greatest complaint — and the biggest potential asset in carrying out his plan — is UMG’s share price, which is down 39% from its peak and 23% lower than the closing price on its first day of trading more than four years ago. The company previously traded at a multiple of more than 30 times, and it now trades at a 15.6 times multiple.
“Effectively what’s happening here is, we are using a merger to effectuate significant corporate change of the company, changes in the balance sheet of the company, changes in the board of directors of the company, changes in the dividend policy and a re-listing of the company or listing of the company on the New York Stock Exchange,” Ackman said.
Lucian Grainge’s contract and “no changes” to management
Pershing executives said they anticipate no changes to the leadership of the company, which they say is running well.
Ackman said that while there should be no major costs related to a change of control of the company, there are contractual agreements with certain executives, including UMG Chairman and CEO Lucian Grainge. Pershing’s offer includes a condition that it can reset or redo Lucian’s contract, Ackman said.
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“My view is, his contract is much too complicated, and there’s an opportunity to restructure [it] in a way that makes sense,” Ackman said. “But other than Lucian’s [contract], I do not believe there’s any employee-related change of control that is triggered as part of this arrangement.”
In August of last year, Grainge topped Billboard’s list of the best-paid music executives for the third time in four years for his 2024 compensation of $39.6 million — about $2.5 million more than SiriusXM CEO Jennifer Witz.
Grainge’s 2024 earnings were low compared with previous years, however. In 2021, Grainge’s $258.1 million worth of bonuses — all paid by former parent company Vivendi — pushed his total earnings to $308.2 million. In 2022, his earnings returned to a more normal $49.7 million before surging to $150.3 million in 2023, due mainly to a $100 million “transition award” that moved him from all-cash compensation to a mix of cash and equity that’s typical for public company executives.
Using AI to its advantage
Pershing executives dismissed questions from analysts about threats to UMG’s revenue from AI-generated works, and instead pointed to what they say are revenue-making opportunities.
From automating A&R to “being able to predictively figure out who might chart or who might break out on social media” and better engaging with fans, Pershing partner Feroz Qayyum said AI will make UMG’s business more efficient.
“These are all ways that UMG can better use AI to make their business more efficient and their catalog even more valuable,” Qayuum said.
