Universal Music Board Unanimously Rejects Pershing Square Offer

Photo Credit: Nick Fewings

As expected, Universal Music Group’s board has formally rejected Pershing Square’s $64 billion takeover proposal after being urged to do so by Bolloré Group.

We covered Bolloré Group’s clear-cut opposition to the bid earlier this week, when CEO Cyrille Bolloré criticized key elements (among them price and control particulars) of the offer during his own business’s annual meeting.

“I don’t think that this offer is positive, I don’t think it would be positive for the company, and I encourage UMG management to reject that offer,” he summed up.

And as Pershing Square’s Bill Ackman had acknowledged that Bolloré Group’s approval was a mandatory stop on the road to wrapping the deal – “without Bolloré we don’t have a transaction” – the development seemingly put an end to the takeover push.

Now, the Universal Music board has made that end official by unanimously deeming Pershing’s offer to be “not in the best interests of UMG, its shareholders, artists, songwriters, employees and other stakeholders.”

“After careful review with the assistance of outside financial and legal advisors,” the company proceeded, “the Board has rejected the proposal because it fundamentally and materially undervalues UMG and will not deliver superior value creation.”

From there, the major took a bit of a victory lap by touting its financials, Streaming 2.0 initiatives, licensing agreements, and more. As for its response to some of the criticism levied by Pershing and Ackman – concerning a sagging share price and an alleged lack of earnings transparency – UMG also emphasized its expanded buyback program, SPOT selloff, and “enhanced financial disclosure” commitments.

In a statement, board chair Sherry Lansing lauded Universal Music head Lucian Grainge’s perceived “ability to deliver sustainable growth and continued value creation for all stakeholders.”

Meanwhile, Grainge himself reiterated Universal Music’s strategic objectives – and underscored plans to provide “shareholders with greater insight” moving forward.

“We remain committed to leading the industry by attracting the world’s top talent, deepening fan engagement globally, and driving innovation,” Grainge said. “Central to that mission is fostering an environment that champions human creativity, protects artists, songwriters, and entrepreneurs, and expands opportunities for growth and success.

“As we execute our strategy and deliver maximum long term value, we look forward to providing shareholders with greater insight into the drivers of our performance and future direction of our business,” he concluded.

Though the Pershing bid’s rejection was probably already baked into Universal Music stock’s value – as noted, the writing was on the wall here – UMG dipped slightly during today’s trading to finish at €19.50 (currently $22.75).

At the time of writing, Ackman didn’t appear to have addressed the development on X, and Pershing Square didn’t seem to have published a related release.