Market participants remain sharply divided over the prospects for billionaire Bill Ackman’s Pershing Square to acquire Universal Music Group in a deal valued at about $64 billion. The spotlight is on the Bolloré family and Vivendi, whose combined stakes approach 32% of UMG, as analysts say their response will largely determine the bid’s fate.
UMG confirmed on Wednesday that its board will review the proposal and consider its "implications" for stakeholders, but the company provided no further comment. Neither Vincent Bolloré nor Vivendi has publicly responded to the offer.
The proposal from Pershing Square is a mixture of cash and shares and is valued by the bidder at roughly 30.40 euros per UMG share. That level exceeds the company’s former record share price of 29.49 euros, set in May 2024.
Analysts split on whether Bolloré and Vivendi will back the deal
J.P. Morgan said it does not expect Vivendi and the Bolloré family to support the takeover, arguing that there is "nothing in [the] proposal that UMG could not do itself" and suggesting Bolloré may prefer to pursue value realisation on his own timetable.
Analysts at AlphaValue described the move as a U.S. listing "disguised as a merger," noting that should Vivendi and Bolloré accept, the transaction could supply a welcome cash injection for both groups.
Morningstar declined to predict whether the major shareholders will endorse the bid, but said the merger could help unlock value in UMG, which Morningstar regards as "grossly undervalued." The firm added that beyond the major holders - Bolloré, Vivendi, Tencent and Pershing Square itself - other shareholders would have "little to say in the outcome."
Deutsche Bank did not offer a view on whether the Bolloré camp will back the deal, but labeled the offer "opportunistic and timely" in light of UMG’s relative weakness versus the broader market, referencing a year-to-date decline of around 14% as of Tuesday.
ING’s analysts warned of "a bit of wishful thinking" in some of the more optimistic valuation scenarios, while acknowledging Pershing Square’s proposal raised legitimate points about UMG’s strategic shortcomings. ING noted on Tuesday that the deal "might well fail."
What remains uncertain
At this stage the outcome hinges on whether Bolloré and Vivendi decide the proposed combination - and the U.S. listing element it entails - aligns with their objectives for control and value extraction. With UMG’s board beginning a formal review and major shareholders silent, analysts say the situation is unresolved and could go in multiple directions.