Pershing Square has proposed a merger with Universal Music Group through its acquisition vehicle, as the activist investor seeks to unlock value in the world’s largest music label.

The proposal offers shareholders €9.4bn, equivalent to approximately $10.8bn, alongside shares in a newly listed entity, valuing the business at €30.40 per share, a 78% premium to its last closing price.

The transaction would combine Universal Music with Pershing Square’s acquisition vehicle and shift the company’s primary listing from Amsterdam to the New York Stock Exchange.

As part of the proposal, approximately 17% of Universal Music’s shares would be cancelled, while governance changes would include the appointment of Michael Ovitz as chairman alongside Pershing Square representatives.

The move comes after a period of share price underperformance, with Universal Music having lost around 26% of its market value over the past 12 months.

Pershing Square has argued that the company’s valuation has been constrained by structural and communication issues, rather than underlying business performance.

“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,” said Bill Ackman, CEO of Pershing Square.

The proposal has not yet received support from key shareholders, including Vivendi and Bolloré, which together hold significant stakes in the company.

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