Universal Music’s board has rejected billionaire Bill Ackman’s takeover proposal, arguing it “materially undervalues” the company and is ultimately not in the best interest of shareholders or artists.
The company’s board unanimously rejected the $65bn (£48.3bn) proposal from Ackman’s Pershing Square Capital on Friday, as it offered to buy the world’s largest record company last month.
Pershing Square proposed a cash and stock offer through its acquisition vehicle, valuing the company at roughly €30.4 (£26.3) per share.
The deal would have merged Universal with a blank-cheque company.
In a statement on Friday, Universal said: “The board has rejected the proposal because it fundamentally and materially undervalues UMG and will not deliver superior value creation.
“The Board has heard from many of UMG’s shareholders and other stakeholders and believes there is a strong consensus supporting the Board’s decision.”
Universal’s largest individual shareholder, Bollore, also urged the board to reject Ackman’s offer.
The company, which is linked to artists such as Taylor Swift and Kendrick Lamar, also noted recent plans to expand its share buyback programme and sell half of its stake to streaming giant Spotify, which remain “under continuous review”.
But the company has seen its shares struggle in recent years, falling behind the broader market, with the group’s share price down over 20 per cent in the last year.
Ackman argued moving its listing from Amsterdam to New York would help boost its value, with Pershing also wanting the group to dispose of its entire Spotify holding, which is valued at about £1.3bn.
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