Universal Music targeted in takeover bid by hedge fund Pershing Square

American hedge fund Pershing Square, led by the activist investor Bill Ackman, announced Tuesday that it had offered to buy Universal Music Group in a merger, saying it believed the world’s biggest music label was undervalued by stock markets.

Pershing Square said its offer to Universal shareholders included 9.4 billion euros ($10.9 billion) in cash plus 0.77 shares in the new entity for each UMG share. After a merger with Pershing Square SPARC Holdings, an acquisition company, the new entity would be listed on the New York Stock Exchange. Universal currently trades on the Amsterdam Stock Exchange.

The Reuters news agency says Pershing Square’s cash-and-shares offer values Universal Music at around 30.40 euros ($35) per share, 78% over its last closing price of 17.10 euros and making the deal worth 55.75 billion euros ($64.31 billion).

The merged company would boast a stable of top artists including Taylor Swift, The Weeknd, Lady Gaga, Billie Eilish and Drake.

Pershing Square hopes to close the deal by the end of 2026.

“UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business,” Ackman said in a statement.

The company pointed to uncertainty about French conglomerate Bollore’s plans for its 18 percent stake in Universal, delay in listing on the U.S. stock market, and “underutilization of UMG’s balance sheet” among concerns that have held back the shares’ performance.