Bill Ackman bet that the music industry has a strong future ahead. His firm Pershing Square offered $64.4 billion for Universal Music Group - a 78% premium to the prior closing price. UMG owns Taylor Swift's label and controls major song catalogs worldwide.
Shareholders would receive $10.85 billion in cash plus 0.77 shares of a new merged company. UMG would move to the NYSE as its primary listing.
A 78% premium signals Ackman believes the market undervalues UMG significantly.
Ackman owns 10% of UMG since 2021. He argues that UMG's stock price fell due to factors unrelated to the music business itself.
His thesis: streaming creates lifelong customer relationships, making music economics stronger than the old CD era.
UMG's board has not responded to the offer. Other bidders may emerge in a competitive auction for global music rights.
