Bill Ackman’s Pershing Square investment vehicle has offered to buy music studios giant Universal Music Group (UMG).
The US billionaire’s firm has proposed a cash and stock deal to take control of the Dutch-US business, which runs Abbey Road studios and labels including EMI and Island Records.
Universal is the world’s largest music company and owns extensive music catalogues from artists including The Beatles, Queen, Adele, Taylor Swift and Kendrick Lamar.
It is estimated that the deal would value Universal at around 55 billion euros (£48 billion).
The studio giant would merge with a newly-formed blank-cheque company set up by Pershing Square as part of the deal.
Pershing Square, which already owns a stake in Universal, said Universal investors would receive 5.05 US dollars (£3.81) in cash and 0.77 shares in the new company for each Universal share they currently own.
Mr Ackman, chief executive of Pershing Square, said the group’s share price has “languished” as he claimed that the proposal could help drive an improvement in performance.
He said: “Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance.
“However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.”
Mr Ackman also said the group had partly underperformed in recent years due to “uncertainty” related to the Bollore Group’s 18% stake in the company.
He also highlighted postponed plans to list the business, which currently has a primary listing in the Netherlands, in the US.
The group postponed plans for a stock market listing in the US last month in the face of market uncertainty.
