(Bloomberg) — 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.
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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 ($45.6 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.
(Updates with context from sixth paragraph.)
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