Pershing Square founder Bill Ackman appears before Congress.
Pershing Square has distributed about 47 million shares in Universal Music Group (UMG), leaving its own stake at approximately 140 million shares.
Pershing Square Capital Management formally announced the move today, three years and change after first purchasing a piece of Universal Music from Vivendi.
In connection with that initial investment, Pershing rolled out multiple “finite-life co-investment vehicles” to hold a portion of the UMG shares.
Now, with those finite-life vehicles having nearly hit their January 31st end date, the involved funds “have elected to distribute UMG stock to their limited partners rather than cash.”
That refers specifically to the aforementioned 47 million shares, representing about 2.6% of the major label and reaching “non-Pershing Square affiliated investors.”
Even after this tax-free stock distribution, Pershing Square proper holds the initially noted 140 million UMG shares (7.6% of the business), including stakes attributable to its core funds, founder Bill Ackman, “his affiliates,” and employees.
Running with the point, Ackman and his affiliates aren’t “selling any shares in connection with the distribution,” per the announcement. And Pershing “continues to believe that UMG will remain an attractive long-term investment,” with its present share price “substantially undervalued,” the text drives home.
Reading between the lines there, it’s certainly possible that 2025 will bring a more aggressive push for Hilversum-headquartered and Amsterdam-listed Universal Music to relocate.
Hardly a stranger to investor activism, Pershing Square (which itself is exiting the Euronext Amsterdam at January’s end) and the Universal Music board member Ackman began urging UMG’s relocation this past November.
“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,” Ackman wrote in part at the time.
Out of the gate, Universal Music pushed back against the blunt suggestion – though time will tell how the situation unfolds throughout 2025. As noted, Pershing and Ackman are far from inexperienced in this area. Plus, UMG stock is, in fact, still trading at a material discount.
In any event, Universal Music last year acknowledged Pershing’s right to spearhead a U.S. listing involving its owned UMG shares. Ackman previously signaled that this listing would arrive sometime during 2025, and for obvious reasons, it’ll be worth closely monitoring, among other things, the relevant market cap.