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It is Deja Vu at Universal Music Group as it appears Bill Ackman’s pursuit of the world’s largest record label has come full circle. After a years-long saga in which he built a stake in 2021, joined and quit the board, he is officially back with a Better Now proposal. When you can’t get no Satisfaction from the boardroom, maybe it’s time to buy a sizeable stake in the company.
Ackman and Pershing Square’s proposal is playing all the hits from the activist playbook: redomicile from the Netherlands to Nevada, shift the listing from Amsterdam’s Euronext to the New York Stock Exchange, sell Universal’s Spotify stake, take on new debt, and install a fresh board including Michael Ovitz. It appears these are essentially the structural changes Ackman pressed for during his time as a director, now in a new package that includes Ackman’s SPARC investment vehicle that houses the remaining funds from the traditional SPAC that didn't find a company to merge with. As was sung in Mamma Mia (or by Abba), “I have a Dream.”
The deal hinges on approval from two-thirds of voting shareholders, which makes the kingmaker in this situation the Bolloré Group’s Vincent Bolloré, who owns a roughly 28% stake (including Vivendi’s holdings). Ackman told the Financial Times that the group responded that his proposal was “music to our ears,” but cautioned that “without Bolloré we don’t have a transaction.” As the Rolling Stones once said, You Can’t Always Get What You Want.
Universal’s board, meanwhile, confirmed receipt of the “unsolicited proposal” and expressed complete confidence in CEO Sir Lucian Grainge and the current strategy. Peter Gabriel sung it well: “I have the touch.”
What happens next depends largely on Bolloré. But after a stint on the board, a quiet exit, and now a new proposal, Ackman is clearly not done with Universal – and he’s making his return the way only Adele could put it: Hello (from the other side).
Have a great weekend,
GPP team
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