Billionaire hedge fund manager Bill Ackman has offered to buy Universal Music Group — home to musicians such as Taylor Swift, Sabrina Carpenter and Elton John — in a $64 billion deal.
Universal Music is the world’s largest record company and one of the big three record labels, alongside Sony Music Group and Warner Music.
Ackman, a billionaire supporter of Donald Trump, said in a statement that while the company, led by the British-born Lucian Grainge, had done “an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance”, there are several reasons for its underperforming stock price that are “unrelated to the performance of its music business”.
There is also the matter of French billionaire Vincent Bolloré. His family’s Bollore Group is UMG’s biggest shareholder, with a stake of more than 18 per cent. Further, his media holding company, Vivendi, has a substantial stake.
As part of the deal, Ackman has proposed naming Michael Ovitz, the one-time Walt Disney Company president, as chairman, along with two representatives from Pershing Square.
The deal, which would merge UMG with Pershing Square SPARC Holdings, would move the record company’s primary stock listing from Amsterdam to the New York Stock Exchange.
Ackman endorsed Trump’s 2024 candidacy and has called him the “most pro-business president we’ve ever had”. If his bid is successful, Ackman will become one of the most prominent players in the music world at a time when the industry is wrestling with the impact of artificial intelligence.
Universal Music has opposed tech firms using copyrighted material to create AI-generated music.
Research from French streaming service Deezer suggests that 97 per cent of people cannot tell the difference between AI-generated music and human-composed music. Roughly 50,000 fully AI-generated tracks are now uploaded to the platform every day, accounting for 34 per cent of daily deliveries.
Ackman is known for making multibillion-dollar bets on public companies that he regards as attractively priced. He has large stakes in companies such as Alphabet, Amazon and Brookfield.
In his letter, Ackman said that the deal could close by year’s end, provided key conditions are met, including approval by two-thirds of Universal Music shareholders attending a meeting about the offer.