One of the most memed men in high finance could upend the music business.
What happened: Pershing Square Capital — the hedge fund owned by controversial investor Bill “Billionaire Activist Man” Ackman — has offered to acquire Universal Music Group, the world’s largest record company. The deal would see Universal merge with a special purpose acquisition company valued at around US$64 billion.
New Universal would be incorporated in Nevada and list its shares on the New York Stock Exchange; two-thirds of shareholders need to support the deal for it to happen.
Catch-up: Pershing Square is a top shareholder in Universal, acquiring its stake just before the company went public in Amsterdam in 2021. Ackman was bullish, comparing music to food and water in terms of necessity, even adding “you can’t license IP from food and water.”
But the relationship between Pershing Square and Universal has been contentious, with Ackman reducing his stake and resigning from the board of directors last year.
Why it’s happening: Universal shares have lost more than a third of their value since the company went public. Purported reasons for the dip include AI disruption and fears about the future of streaming, but Ackman believes that listing the company in New York would cure what ails Universal by unlocking more deep-pocketed U.S. investors and bolstering liquidity.
Why it matters: Universal is home to the biggest names in music, from Taylor Swift to The Beatles, and controls more than 30% of the recorded music biz. This deal is directly correlated to where and how you might hear some of your tunes in the future.—QH
