Akman’s Stake Sale in UMG
Pershman Square Bill Akman is set to generate $1.4 billion from the sale of “approximately 2.7% of the shares” in Universal Music Group.
This is according to Bloomberg, which reported today (March 13) that the terms of the transaction indicated “Pershing Square Holdings Ltd., Pershing Square LP and Pershing Square International Ltd. are prepared to evaluate a proposal of about 50 million Universal Music shares at €26.60.”
Bloomberg also stated that Morgan Stanley is involved in the sale of these shares.
Details from Akman on X
In a statement published on X earlier today, Akman remarked: “We have decided to sell a portion of our UMG position today.”
Akman added: “UMG has significantly outperformed the rest of our portfolio (excluding GSES) in light of its exceptionally strong recent results.
“UMG was our largest holding, accounting for more than ~27% of our capital. After this sale, it will still represent about ~17% of our portfolio.”
Akman’s statement about X continued: “(Sir Lucian Grainge) and the UMG team have done an excellent job growing the company. We believe that UMG is one of the premier enterprises we’ve had the privilege to own.”
“At the end of last year, we utilized our registration rights to facilitate UMG’s listing on a major U.S. exchange by the end of this year, which we believe will be extremely beneficial for the company.”
“In an uncertain world, owning music royalties with the best management team in the industry is a remarkably advantageous and profitable position.”
The Universal Music Group, now listed on Euronext in Amsterdam, saw its share price close at €27.90 on Thursday.
UMG released its financial results for the fourth quarter and full year 2024 last week, reporting total revenue of €11.834 billion ($12.81 billion), an increase of 7.6% year-on-year.
Meanwhile, revenue from the company’s recorded music segment reached €4.624 billion annually, up 9.1% year-on-year, which equated to $5.00 billion based on average exchange rates for the year, according to IRS data.
The adjusted EBITDA for the company was €2.661 billion ($2.88 billion), reflecting an increase of 13.8% year-on-year.
In January, we reported that Ackman’s Pershing Square Capital Management (PSCM) oversees an investment fund that holds shares in Universal Music Group, distributing 47 million shares of the company for fund co-investment.
The announcement coincided with the news that Pershing Square Holdings, controlled by PSCM, received regulatory approval for its listing on the Amsterdam Stock Exchange.
As of the end of 2023, Pershing Square Holdings controlled 10.25% of UMG shares, per UMG’s annual report.
The 47 million shares distributed by Pershing Square in January represented 2.6% of the outstanding UMG shares. After the distribution, the investment company retained 140 million shares, or 7.6% of UMG, as stated in their January announcement.
“PSVII funds opted to distribute UMG shares among their limited liability partners rather than in cash, as we believe UMG shares are significantly undervalued at current levels, and the free distribution allows us to retain ownership of UMG shares,” Pershing Square stated at that time.
Pershing Square acquired its 10% stake in UMG during a series of transactions in the summer of 2021.
As Akman noted in his statement published on X today, at the end of last year, Pershing Square requested UMG’s secondary listing on the American Stock Exchange.
A statement issued by UMG in November, in response to this request, indicated that Pershing must sell at least $500 million worth of UMG shares as part of the listing conditions.
Bill Ackman’s Pershing Square to raise $1.4bn from sale of 2.7% stake in UMG (report)
