Taylor Swift Heads For New York Listing as Bill Ackman Proposes $64B Universal Music Merger

Universal Music Group, home to artists such as Taylor Swift and Sabrina Carpenter, could be headed for a New York listing after billionaire activist Bill Ackman proposed a $64 billion merger.

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Move from Amsterdam to New York

Under the proposed deal announced today, Ackman’s investment firm Pershing Square Capital Management would merge UMG, which is listed in Amsterdam, with a U.S.-based acquisition vehicle.

Ackman said this would value the record label at €30.40 per share or around $64.7 billion. That would be a 78% premium to the company’s closing price last Thursday before the Easter holiday.

UMG shareholders who agree to the deal will get €9.4 billion in cash, equivalent to about €5.05 per share, plus 0.77 shares of the new company.

Bill Ackman

The deal would see UMG switch its listing to New York only a month after it shelved plans for a U.S. listing because of uncertain market conditions. Ackman sees a New York listing as a good way to increase the company’s share price.

Share Price Has Languished

“UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction,” Ackman said.

He believes that the deal could generate €15 billion over the next five years for investments, acquisitions and share repurchases.

The newly created company would take on an additional €5.4 billion in debt, and UMG would sell its holding in Spotify Technology SPOT -0.92% ▼ for about €1.5 billion after paying taxes and compensating artists.

Uncertainty over what French billionaire Vincent Bollore will ultimately do with his stake has also weighed on shares, Ackman said.

“Pershing Square is currently the fourth largest shareholder in Amsterdam-listed UMG with a 4.7% stake. French billionaire Vincent Bollore is the one who needs to be convinced by Ackman’s proposal, given his company owns 18.5% of UMG and additional exposure through 30%-owned Vivendi which holds 13.4% of UMG. China’s Tencent TCEHY +0.19% ▲ is also a major shareholder with an 11.4% stake. Those are chunky stakes, and so Ackman will need a full-on charm offensive to win them over,” said Dan Coatsworth, head of markets at AJ Bell.

Nicolas Marmurek, analyst at Square Global, said that without Bollore’s support the “proposal looks very much dead from the start.” “We doubt Bollore will accept such terms,” he said, as reported by Bloomberg.

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