Fresh off of rejecting a takeover proposal from capital fund Pershing Square, Universal Music has announced it is repurchasing a sizable portion of its stock back from the company founded and operated by billionaire investor Bill Ackman.
The world’s largest record company will repurchase over 14.2 million shares from Pershing, worth about $290.5 million (€250 million), as part of the fund’s complete unwinding of its position in Universal Music. Pershing has 80.6 million shares to unload, per Bloomberg. Universal Music’s stock is down 3.25% today.
Universal Music did not immediately respond to a request for comment from Variety on any plans to acquire more of Pershing’s stake in the company beyond the share buyback announcement.
The news sets up the conclusion of a relatively longstanding financial relationship, which culminated in Universal’s rejection of a proposition from Pershing that arrived early last month.
In April, Ackman’s company made an out-of-the-blue announcement that it had submitted a takeover proposal to Universal Music’s board of directors “designed to deliver significant benefits to UMG stakeholders.”
Pershing had previously acquired 10% equity in Universal Music through two transactions in 2021; those deals were worth about $4 billion combined.
Universal Music and its leadership have “done an excellent job nurturing and continuing to build a world-class artist roster and [in] generating strong business performance,” said Ackman in a statement. “However, UMG’s stock price has languished due to a combination of issues that are unrelated to the performance of its music business and importantly, all of them can be addressed with this transaction.”
Last week, Universal Music rejected the bid “because it fundamentally and materially undervalues UMG and will not deliver superior value creation,” the company wrote in a statement.
That attempted takeover is a cornerstone of Pershing’s business — what’s known as “activist investing,” in which a fund buys a significant equity stake in a company to push through changes that would positively impact its stock price.
Pershing Square did not immediately respond to a request for comment from Variety on Universal Music’s rejection or details around the unwinding of its position in the company.
