Billionaire Bill Ackman is one the most powerful behind-the-scenes players in the modern financialized music rights industry.
According to Universal Music Group‘s 2023 annual report, Ackman, via Pershing Square Holdings, controls 10.25% of the company’s stock, making him UMG’s second-largest individual shareholder behind Vincent Bolloré.
Ackman also sits on UMG’s board.
Now, he’s asking for a structural uprooting of UMG’s domicile and public listing in Amsterdam; Ackman wants both moved to the US.
UMG says at least some of that request could be out of the question.
Ackman declared on X on Friday (November 8) that he wants UMG to move its listing from Amsterdam’s Euronext stock exchange to a US exchange – the NYSE or Nasdaq – by the end of 2025.
Ackman further declared that he’d started internal conversations about moving UMG’s domicile (aka its global corporate HQ, currently located in Amsterdam) to the US.
Ackman believes that shifting UMG’s listing out of Amsterdam and into the US would boost the company’s public value.
However, the “tipping point” for Ackman’s suggestion, according to the investor, were attacks on November 7 against Jewish people and Israeli citizens in Amsterdam following a soccer match.
Ackman, who is known to be politically outspoken on Twitter, is Jewish and married to an Israeli-American, Neri Oxman.
Wrote Ackman: “I have [begun] the conversation with Universal Music Group (on whose board I sit) which is domiciled in Amsterdam as well as listed there, about moving its domicile and its listing to the United States, which will offer similar as well as other highly material benefits.”
“Pershing Square has a contractual right to cause UMG to be listed in the US.”
Bill Ackman
He added: “Pershing Square has a contractual right to cause UMG to be listed in the US. We will exercise this right and achieve a US listing for UMG no later than some time next year. UMG trades at a large discount to its intrinsic value with limited liquidity in significant part due to it not having its primary listing on the NYSE or Nasdaq and not being eligible for S&P 500 and other index inclusion.
“We are going to fix this. Now is a good and appropriate time to do so.”
On Saturday (November 9), Universal Music Group replied to Ackman’s suggestions in a company statement. It read:
“We have taken note of Bill Ackman’s post in relation to Pershing Square and UMG on X yesterday. Neither UMG nor any of its other board members were involved in the formulation of the views in that post.
“As disclosed in UMG’s listing prospectus, Pershing has the right to request a listing in the US subject to a Pershing entity selling at least [USD] $500 million in UMG shares as part of the listing.
“Pershing does not have any right to require UMG to become a US domiciled company or delist from Euronext Amsterdam.”
Universal Music Group statement
“Pershing does not have any right to require UMG to become a US domiciled company or delist from Euronext Amsterdam. While the company will endeavor in good faith to comply with its contractual obligations with respect to undertaking the process of a US listing at the request of Pershing, any actions or decisions beyond those necessary to comply (including any decisions to change the domicile of the company) will be based on an analysis taking into account what is value maximizing and in the best interests of all the shareholders of the company.”
With its 10.25% current share, Ackman/Pershing Square owns a stake in UMG currently worth around EUR 4.45 billion – equivalent to USD $4.77 billion. (UMG has a current market cap on the Euronext of EUR 43.37 billion).
In other words, according to UMG’s statement, Ackman/Pershing would have to be willing to re-list around a tenth of its current Amsterdam-based UMG shareholding in the US (i.e. hitting that $500m threshold) to force a new listing on the Nasdaq or NYSE.
Even if that happens, though, it doesn’t affect Ackman’s other requests: that UMG relocate its official domicile, or delist from the Amsterdam Euronext entirely.Music Business Worldwide