Universal Plans US Share Sale for Pershing Square Stake

Universal Music Group NV has agreed to plan a US share sale by Sept. 15, in order to fulfill an agreement with billionaire Bill Ackman’s hedge fund Pershing Square.

The Amsterdam-listed entertainment company will use reasonable efforts to launch an underwritten offering for the sale of shares owned by Pershing Square, according to a statement Wednesday.

The agreement between Pershing Square and UMG requires that Ackman’s firm sell $500 million of its shares in connection with a US listing, according to a post on Ackman’s X account following UMG’s statement. Pershing Square’s total investment in UMG is worth $3.3 billion, according to Ackman’s post.

Pershing Square believes a US listing will substantially increase the valuation of UMG shares, as well as demand for them from investors who are limited to buying US-listed securities, Ackman wrote. It would also likely attract additional analyst coverage for UMG, and greatly improve liquidity, he wrote.

UMG’s Amsterdam shares rose 1.1% on Wednesday, giving the company a market value of €44.3 billion . 

The company’s move comes months after Ackman said he had begun a conversation with UMG to move its domicile and its listing, writing on X that Pershing Square had a contractual right to cause UMG to list in the US. UMG responded that while the hedge fund could request the US listing subject to the sale of at least $500 million worth of shares, Pershing Square did not have the right to require UMG to become US-domiciled or delist from Euronext Amsterdam.

UMG is the world’s largest music company, and is home to artists including Billie Eilish and Taylor Swift.

This article was generated from an automated news agency feed without modifications to text.