Pershing Square set to sell Universal Music stake after bid rejection

Bill Ackman’s relationship with Universal Music Group just went from complicated to over. The billionaire investor plans to sell Pershing Square Capital Management’s stake in UMG after the music giant’s board rejected his takeover proposal, ending a multi-year saga that has seen Ackman go from board member to spurned suitor.

The rejected bid, submitted on April 7 and formally turned down on May 29, valued UMG at approximately $64-65 billion, or roughly €55.75 billion. That included a cash component of €5.05 per share and represented a 78% premium to UMG’s closing price on April 2. UMG’s board was unmoved, calling the offer fundamentally insufficient.

The deal that wasn’t

Ackman’s proposal was structured as a cash-and-stock deal designed to address what he viewed as a core problem: UMG’s persistently stagnant stock price on the Amsterdam exchange. Part of the financing plan involved selling UMG’s stake in Spotify, which would have helped fund the acquisition.

UMG’s board rejected the offer, stating it undervalued the company and failed to present a superior value creation strategy compared to what management already had in place. Cyrille Bolloré, a key UMG shareholder with deep ties to the company through the Vivendi legacy, strongly opposed the bid.

Ackman’s long and winding road with UMG

Pershing Square’s involvement with UMG has been anything but straightforward. Ackman originally built a stake of nearly 10% in the company, a position assembled through transactions connected to Vivendi’s restructuring. He also served on UMG’s board until May 2025, giving him an insider’s view of the company’s operations and strategic direction.

Since then, the stake has been trimmed to approximately 4.5%. The bid itself can be read as a last-ditch effort to reshape the relationship on Ackman’s terms. Rather than continue as a minority shareholder watching the stock languish, he tried to buy the whole thing.

What this means for investors

The planned stake sale introduces a meaningful overhang for UMG’s stock. Pershing Square’s 4.5% position is not trivial. Depending on how Ackman executes the exit, whether through block trades, gradual market sales, or a negotiated transaction with another institutional buyer, the process could create short-term pressure on UMG’s share price.

The governance dynamics are worth monitoring as well. Bolloré’s strong opposition to the Ackman bid suggests that the controlling shareholder group has a firm grip on UMG’s strategic direction, meaning minority shareholders have limited ability to force changes if performance continues to disappoint.

For investors tracking UMG’s next moves, the critical signal will be whether the board follows through on addressing valuation concerns through structural changes like a US listing. Ackman’s exit from the shareholder register will remove one of the loudest voices pushing for change.