Universal responds to Bill Ackman’s request to move listing from Amsterdam to the United States.
Bill Ackman stated that Pershing Square Holdings (PSH), the investment holding company he manages, has a ‘contractual right’ to have UMG listed in the United States.
Universal Music Group (UMG) has responded to a recent suggestion from billionaire board member Bill Ackman to delist the company from Amsterdam’s Euronext stock exchange next year.
Ackman made this suggestion following a clash in Amsterdam between pro-Palestinian protesters and Israelis after a soccer match on Nov. 7, where around 60 people were arrested.
In a post on Nov. 8, Ackman mentioned that he has started discussions with UMG about relocating the company’s domicile and listing to the United States from the Netherlands.
UMG stated in a Nov. 9 release that neither the company nor any other board members were involved in the views expressed in Ackman’s post.
Ackman emphasized that PSH has the right to request a listing in the United States and plans to achieve this by next year.
UMG clarified that while PSH can request a US listing, it cannot compel UMG to change its domicile or delist from Euronext Amsterdam.
“The company will commit to meeting its contractual obligations regarding the process of a US listing at the request of Pershing,” UMG affirmed.
However, UMG indicated that any additional actions beyond fulfilling these obligations will be considered after assessing what is best for the shareholders of the corporation.
To request a US listing, PSH must first sell at least $500 million worth of UMG shares, as noted by the music company.
PSH initially acquired a 7.1% stake in UMG in August 2021, with an affiliate later buying an additional 2.9% stake, increasing the total stake to 10%.
UMG shares have not shown significant growth in recent years, trading mainly between 17 euros and 29 euros.
UMG Performance
In its August report on interim financial performance, PSH highlighted revenue challenges facing UMG despite overall growth.
While revenue and income increased in the recent second quarter, subscription and streaming revenues declined, moving from double-digit to mid-single digit growth, according to PSH.
PSH believes that the underperformance in Q2 will be short-term and does not affect the long-term growth potential of UMG.
Furthermore, PSH mentioned that investors initially overreacted to the impact of AI technologies on UMG but later regained confidence as they understood the risks better.
“We believe that as investors gain a better understanding of UMG’s revenue growth potential and industry health, the share price is likely to significantly increase from current levels,” PSH stated.
Ackman also suggested delisting PSH from the Amsterdam exchange as most of the stock’s trading occurs on the London Stock Exchange.
