Bill Ackman’s Pershing Square expects to raise $1.4 billion from the sale of a 2.7% stake in Universal Music Group, according to a report in Bloomberg.
Ackman announced the sale on social media, but the numbers are from a Bloomberg source citing knowledge of the deal, which reportedly cites “an offering of about 50 million Universal Music shares at €26.60 each.”
Ackman wrote about his plans in a post on X on Thursday. While he had some strong words about UMG, in which Pershing currently owns a 7.6% stake, delist from the Euronext in Amsterdam in the wake of terrorist attack in November (and Pershing delisted from the city in January), his comments about the company and its chairman, Lucian Grainge, are a borderline mash note. The company has agreed to a secondary listing on the U.S. stock exchange, which requires Pershing to to sell at least $500 million in UMG shares.
“We decided to sell a portion of our UMG position today,” he wrote. “UMG has substantially outperformed the rest of our portfolio (other than the GSEs) year to date in light of its extremely strong recent results. UMG was our largest position going into the day at more than ~27% of our capital. After the sale, it will still be our largest position at about ~17% of the portfolio.
“[Grainge] and the UMG team have done a superb job growing the company,” he continued. “We believe UMG is one of the best businesses we have ever owned. Late last year, we exercised our registration rights in order that UMG obtains a listing on a major U.S. exchange later this year, which we believe will be extremely beneficial to the company.
“In a world of uncertainty,” he concluded, “owning a royalty on music with the best management team in the industry is a blissfully comfortable and profitable place to be.”
UMG’s share price closed at €27.90 on Thursday. The company announced its 2024 earnings last week, posting revenues of $12.81 billion, up 7.6% from 2023.
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