Universal Music (UMG) Rejects Bill Ackman’s $65 Billion Takeover Offer

Universal Music Group (UMG) has rejected an unsolicited $65 billion takeover offer from Bill Ackman’s Pershing Square Capital Management (PS).

Claim 55% Off TipRanks

Unlock trusted, data-backed investing tools with TipRanks Premium, from analyst ratings and forecasts to breaking news and portfolio analysis. Discover high-conviction stock picks and new investing opportunities with the TipRanks Smart Investor Newsletter

The board of directors at Universal Music said the offer significantly undervalued the company and failed to serve the best interests of shareholders and other stakeholders. Universal Music said its board unanimously decided to reject the takeover offer submitted by Pershing Square on April 7 of this year.

The board added that there was strong support from shareholders for the decision to reject Ackman’s offer to buy Universal Music. For Bill Ackman, a prominent hedge fund manager with a big social media following, the rejection is a blow.

The Next Warren Buffett?

Ackman’s bid for Universal Music comes as the investor says he is trying to turn his company Pershing Square into a diversified holding company and investment vehicle similar to Berkshire Hathaway (BRK.B). Ackman has praised Berkshire Hathaway’s Warren Buffett and his investing acumen and track record.

In April, Ackman proposed a cash-and-stock offer that valued Universal Music at €30.40 per share, making the ​deal worth €55.75 billion (US$65.03 billion). In a news release, Universal Board Board Chair Sherry Lansing said the company remains confident in its long-term strategy.

Is UMG Stock a Buy?

Universal Music Group’s stock has a consensus Moderate Buy rating among 10 analysts. That rating is based on seven Buy and three Hold recommendations issued in the last three months. The average UMG price target of €26.01 implies 33% upside from current levels.

Disclaimer & DisclosureReport an Issue

View Comments