Universal Music Group (UMG) announced Wednesday (January 15) that Pershing Square Holdings, led by billionaire investor Bill Ackman, has requested a secondary listing of the music company on a US stock exchange.
Under a previously disclosed agreement, UMG will facilitate an underwritten offering for Pershing Square to sell a portion of its shares by September 15, 2025.
The deal requires Pershing to sell at least $500 million worth of its UMG holdings as part of the listing process.
UMG said: “Pershing Square has exercised its right under the previously disclosed Registration Rights Agreement between UMG and Pershing to request an offering and secondary listing of UMG in the US.”
“Pershing has waived the 120-day filing requirement and, in line with its contractual obligations, UMG will use commercially reasonable efforts to launch an underwritten offering for the sale of certain shares owned by Pershing by September 15, 2025, subject to regulatory approval and market conditions.”
Ackman confirmed the move on social media platform X, saying, “Pershing Square exercised its registration rights in UMG in order to catalyze a U.S. listing of the company. Our reg rights agreement requires that Pershing Square sell $500 million of UMG shares (of its current $3.3 billion investment in the company) in connection with the U.S. listing, a sale we will complete in order for the listing to occur.
“We exercised our right to cause UMG to list in the U.S. because we believe it will substantially increase demand for (and the valuation of) UMG shares from investors who by mandate are limited to investing in securities listed on U.S. exchanges, and likely attract additional analyst coverage for the company. We also believe the U.S. listing will greatly improve trading liquidity for the shares.
“We waived the 120-day filing requirement and extended the date to mid-September in order for UMG to have an appropriate amount of time to complete the listing and offering in a manner best for the company and its shareholders.”
“Pershing Square has exercised its right under the previously disclosed Registration Rights Agreement between UMG and Pershing to request an offering and secondary listing of UMG in the US.”
Universal Music Group
The move follows Pershing Square Capital Management’s distribution of 47 million shares, representing 2.6% of UMG, to the fund’s co-investors earlier this month.
Following the distribution, Pershing Square retained 140 million shares, equivalent to a 7.6% stake in Universal.
As per Ackman’s note today, it now appears Pershing Square will sell a further $500 million-worth of UMG shares on the US exchange.
The push for a US listing for UMG comes after tensions emerged in Amsterdam’s business environment.
In November 2024, Ackman expressed intentions to relocate both Pershing Square and UMG away from Amsterdam following incidents involving the local Ajax football club and Maccabi Tel Aviv. Pershing Square subsequently delisted its own shares from Euronext Amsterdam in December 2023.
At the time, Ackman said the violence in Amsterdam was the “tipping point” for the decision to delist from the city’s stock exchange.
“Concentrating the listing on one exchange, the LSE, and leaving a jurisdiction that fails to protect its tourists and minority populations, combine both good business and moral principles. We can also save money and improve liquidity for shareholders to boot,” Ackman wrote.
UMG, however, said Pershing Square has no right to require the music company to become a US-domiciled company or delist from Euronext Amsterdam.
The development also marks another chapter in the company’s relationship with Pershing Square. Ackman’s investment firm has adjusted its position in the music company several times, having previously reduced its stake to 7.48% from 10% after UMG declined an earlier request to delist from Amsterdam, Reuters noted.
Most recently, the music company said the final decision on any actions beyond the contractual obligations will rest with UMG’s Board of Directors, who will analyze what maximizes value for all shareholders.
UMG, home to global artists including Taylor Swift, remains one of the world’s largest music companies. The upcoming US listing could broaden its investor base.
BNPP Exane analyst William Packer has closely watched UMG and its stock performance for years.
He said this morning in a research note that he anticipates a US listing in 2025, suggesting it could bring benefits such as improved liquidity and potential index inclusions.
Packer expects UMG to maintain its Amsterdam domicile while pursuing a dual listing strategy.
He wrote: “We expect a US listing in 2025, with the consequent benefits to liquidity, index inclusions etc. While uncertainty remains at this stage, we expect a dual listing and the Amsterdam domicile to be maintained. We note that as a foreign private issuer, we believe UMG wouldn’t be subject to GAAP accounting in certain circumstances.”
Packer noted that UMG’s stock faced challenges in 2024, underperforming within the media sector as its Q2 warning prompted a reassessment of subscription streaming’s long-term growth potential.
“While uncertainty remains at this stage, we expect a dual listing and the Amsterdam domicile to be maintained.”
BNPP Exane
This was driven by slowing volume growth, issues with the DSP pricing narrative, and underwhelming ad-supported streaming performance from platforms like Meta, TikTok, and short-form video, he said.
However, Packer added: “With expectations rebased, and the company committed to executing its streaming 2.0 vision, we see 2025 prospects as much improved, and identify UMG as a key pick in media for 2025.”
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