Pershing Square, the investment firm associated with Bill Ackman, is set to divest a significant stake in Universal Music Group (UMG), according to a Bloomberg News account released on Wednesday. The sale would consist of roughly 80.6 million UMG shares offered in an overnight placing, the report said.
Bank of America is handling the marketing of the block and has pitched a price range of €17.66 to €18.62 per share, the Bloomberg report added, noting the euro figures equate to roughly $20.48 at the exchange rate referenced in the report. The report cited a statement on Wednesday as its source for the placing details.
The announcement comes a few days after Universal Music Group turned down Pershing Square’s takeover proposal. Pershing had submitted a cash-and-stock offer in April that, by Reuters' calculations, valued UMG at approximately €55.75 billion. Universal said last week that the proposal "materially undervalued" the company and concluded it was not in the best interests of shareholders, artists or the company.
Universal Music is the company behind major artists such as Taylor Swift, Billie Eilish and Kendrick Lamar. According to the report, Universal Music did not immediately respond to a request for comment, and Pershing Square declined to comment on the planned placing.
The Bloomberg account included stock-movement indicators showing Pershing Square's investment vehicle and Universal Music with slight share-price declines - PSHP at -0.7% and UMG at -0.54% - alongside other market data referenced in the report.
Context and mechanics
The placing being marketed by Bank of America is intended to be executed overnight, according to the Bloomberg report. The pricing band provided - between €17.66 and €18.62 per share - frames the expected execution range for potential investors. The report relays that the placing details were disclosed in a statement on Wednesday.
Responses and next steps
Both Universal Music and Pershing Square have, per the report, refrained from offering additional public comments beyond the statements documented in the placing announcement and Universal’s prior explanation for rejecting the takeover proposal.
As described in the report, the sequence of events is: Pershing Square proposed a cash-and-stock offer in April; Universal rejected that offer last week as materially undervaluing the company; and now Pershing appears to be moving to sell a large block of its remaining UMG shares in the market.