Pershing Square's Push for Universal Music US Listing Faces Dutch Hurdles
Pershing Square's Universal Music Group (UMG) investment and proposed relocation faces contractual limitations, according to recent statements from both parties.
Universal Music Group has clarified that while Pershing Square can request a U.S. listing by selling at least $500 million in UMG shares, they cannot force UMG to leave the Netherlands or delist from Euronext Amsterdam.
Euronext Amsterdam stock exchange building
Bill Ackman, whose Pershing Square holds a 10.25% stake in UMG, argues that the company's current listing status contributes to undervaluation and limited liquidity. He plans to pursue a U.S. listing by next year, citing potential index inclusion benefits and better market access.
UMG's response indicates they will honor contractual obligations regarding a U.S. listing process but emphasizes that any additional changes must maximize value for all shareholders.
Pershing Square's history of successful activist investing includes the Tim Hortons spinoff from Wendy's in 2004, where similar strategic pressure led to significant value creation. However, UMG's case presents unique challenges due to explicit contractual limitations and the company's commitment to all stakeholder interests.
The situation has drawn increased attention as UMG's stock has declined approximately 20% from its summer peak, potentially creating additional pressure for strategic changes.
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