Billionaire Bill Ackman wants to buy the world’s largest music label. While others see a struggling stock, here’s why he sees a goldmine

Universal Music Group represents T-Swift, Drake, Bad Bunny, Justin Bieber, Lady Gaga and Bob Dylan, and Ackman’s into “super durable companies” (2) that generate royalties forever.

The proposed deal would see Universal merge with Pershing Square SPARC Holdings, an SEC-approved acquisition company. This would move the listing from the London Stock Exchange to the New York Stock Exchange, where shareholders will receive $5.92 per share (3), plus 0.77 shares (3) of the new company’s stock for every Universal Music Group share they own.

“Since UMG’s listing, Sir Lucian Grainge and the company’s management have done an excellent job nurturing and continuing to build a world-class artist roster and generating strong business performance,” Ackman said.

In 2021, Ackman said music was no longer a hit-driven business. It’s more focused on subscriber growth (4), with Universal getting royalties on subscriptions. He plans to “unlock value” that’s been untapped, citing streaming penetration and monetizing music IP against AI threats.

As of April 8, Universal Music Group stock is trading at $22.30 (5).

Shake it off

Ackman’s take is that the market is undervaluing a music stock. There’s a disconnect between the music catalogue valuations and Universal Music Group.

Universal’s earnings were $1.46 million (6) in 2025, which was an increase of 5.7% compared to 2024, or 8.7% in constant currency, driven by improvements in recorded music and music publishing. Yet it was down 23% year to date (7) as of April 6.

Pershing Square cited various reasons (1) for the stock price, including the postponement of a U.S. listing, underutilization of the balance sheet and the absence of a publicly disclosed allocation plan and earnings algorithm.

Additionally, suboptimal shareholder relations, lack of investor credit in the valuation for the Spotify stake and uncertainty about the 18% owned by Bolloré Group, the largest shareholder of Universal, have hampered growth.

Who’s afraid of little old me?

While Ackman’s position remains in question, the news does serve as fodder for business talks on the golf course.