Ackman's Pershing Square Plans to Sell 80.6M Shares in Universal Music Group
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 03 2026
0mins
Bill Ackman's Pershing Square is looking to sell its stake in Universal Music Group days after the group rejected a takeover bid. Pershing will sell roughly 80.6M shares in an overnight placing, according to a statement referenced by Bloomberg. Bank of America is marketing the shares at a range of EUR 17.66 to EUR 18.62 each, according to terms seen by Bloomberg. Ackman had proposed acquiring the group at a valuation of about EUR 56B, but Universal rejected the proposal last week saying the bid "fundamentally and materially undervalues UMG and will not deliver superior value creation."
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About PS
Pershing Square Inc. is an alternative asset manager. It manages three primary investment funds, which it refer to as its existing core funds. Its fund investors include retail investors, high net worth individuals, family offices, funds of funds, and institutional investors. Its core investment strategy involves acquiring large minority stakes in high-quality, predominantly North American-listed, large-capitalization growth companies at attractive valuations during periods in which they have underperformed their potential and/or when they are undervalued because the market underestimates their potential or overestimates the impact of certain negative factors on their businesses. In addition, it manages two private funds, Pershing Square, L.P. (PSLP) and Pershing Square International, Ltd. (PSINTL).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Universal Music Rejects Ackman's Takeover Bid
- Takeover Bid Rejected: Universal Music rejected Ackman's takeover proposal valued at approximately €56 billion, asserting that it fundamentally undervalues the company's long-term prospects, demonstrating the firm's confidence in its intrinsic value.
- Share Sale Plan: Ackman's hedge fund plans to offload about 80.6 million shares of Universal Music through an overnight placement, with shares marketed between €17.66 and €18.62, potentially generating around €1.5 billion, which could alter his stake in the company.
- Market Reaction: Following the rejection of the acquisition bid, Universal Music's American depositary receipts fell by as much as 7% on Wednesday, indicating market concerns regarding the company's future valuation despite the industry's previous benefits from streaming platforms.
- Increased Industry Pressure: Although Ackman has been building his stake in Universal Music since 2021, the slowdown in music industry growth and the emergence of AI tools pose new challenges to his long-term investment strategy, potentially impacting future market performance.
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- Long-Term Return Potential: Analysts noted that while Pershing Square demonstrates strong long-term return potential and a scalable business model, they also emphasized that much of the upside is already priced in, indicating a cautious outlook on future growth.
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- Capital Structure Advantage: Jefferies highlighted that approximately 96% of Pershing Square's fee-paying capital is classified as permanent, which mitigates redemption-related outflows and distinguishes it from peers, although its valuation remains above industry averages.
- Potential Risk Factors: BofA analysts pointed out that Ackman's involvement could pose a risk if he reduces his engagement due to retirement or political ambitions, while the concentrated portfolio also presents inherent risks.
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- Takeover Bid Rejected: Universal Music rejected Ackman's takeover proposal valued at approximately €56 billion, asserting that it fundamentally undervalues the company's long-term prospects, demonstrating the firm's confidence in its intrinsic value.
- Share Sale Plan: Ackman's hedge fund plans to offload about 80.6 million shares of Universal Music through an overnight placement, with shares marketed between €17.66 and €18.62, potentially generating around €1.5 billion, which could alter his stake in the company.
- Market Reaction: Following the rejection of the acquisition bid, Universal Music's American depositary receipts fell by as much as 7% on Wednesday, indicating market concerns regarding the company's future valuation despite the industry's previous benefits from streaming platforms.
- Increased Industry Pressure: Although Ackman has been building his stake in Universal Music since 2021, the slowdown in music industry growth and the emergence of AI tools pose new challenges to his long-term investment strategy, potentially impacting future market performance.
See More
Billionaire Investment Strategies Revealed
- Investor Moves: In Q1 2023, billionaires like David Tepper and Philippe Laffont sold Microsoft shares, while Bill Ackman purchased 5,654,078 shares, representing over 14% of his portfolio, indicating strong confidence in the company.
- Market Reaction: Despite concerns that AI tools could replace software, analysts believe these fears are overstated, as Microsoft is actually enhancing its software through AI, and its cloud business is experiencing rapid growth, showcasing the company's competitiveness in the AI sector.
- Investment Strategy Considerations: Investors holding Microsoft may consider locking in some gains and seeking new opportunities, while those yet to invest might find the current valuation at 25x forward earnings attractive for entry, highlighting market appeal.
- Long-Term Outlook: Although there may be short-term fluctuations, Microsoft is expected to deliver long-term returns for shareholders due to its strengths in AI and established businesses, prompting investors to make decisions based on their strategies.
See More
Billionaire Investment Strategies Revealed
- Billionaires Reduce Microsoft Holdings: In Q1 2023, seven out of eight billionaires reduced their Microsoft shares, with David Tepper cutting his position by 82% to 90,000 shares, reflecting a cautious sentiment that could impact market confidence in the stock.
- Bill Ackman Goes Against the Trend: In contrast to his peers, Bill Ackman increased his Microsoft stake by purchasing 5,654,078 shares, which now represents over 14% of his portfolio, indicating strong confidence in Microsoft's future growth and potentially attracting other investors' interest.
- Microsoft's Market Performance: With a market cap of $3.3 trillion, Microsoft's stock has fluctuated between $356.28 and $555.45 over the past year; despite concerns about AI replacing software, its cloud business and AI product growth potential remain robust, suggesting long-term shareholder benefits.
- Investor Strategy Considerations: Given the divergent investment decisions among billionaires, investors should align their choices with their strategies; those already holding Microsoft may consider locking in some gains, while new investors might find an attractive entry point at the current 25x forward earnings ratio, seizing potential low-price opportunities.
See More
Wall Street Analysts Initiate Coverage on Ackman's Pershing Square
- Analyst Coverage Initiation: Wall Street analysts have initiated coverage on Bill Ackman's Pershing Square (PS.N) following the end of the quiet period after its recent IPO, primarily assigning neutral ratings that reflect a cautious market sentiment.
- Long-Term Return Potential: Analysts noted that while Pershing Square demonstrates strong long-term return potential and a scalable business model, they also emphasized that much of the upside is already priced in, indicating a cautious outlook on future growth.
- Strong Underwriter Lineup: The global coordinators and bookrunners for the IPO include Citigroup, UBS Securities, BofA Securities, Jefferies, and Wells Fargo, showcasing a high level of market recognition and professional support for the transaction.
- Muted Market Reaction: Despite analysts' neutral stance on Pershing Square's prospects, the market reaction has been relatively subdued, suggesting that investors remain cautious about the company's future performance, which may impact its short-term stock price.
See More
Analysts Issue Ratings on Ackman's Pershing Square IPO
- Analyst Rating Overview: Following the April 29 IPO of Ackman's Pershing Square, Wall Street analysts predominantly assigned a Hold rating to the stock, recognizing its business model and high margins, yet noting that its current valuation reflects these strengths.
- Capital Structure Advantage: Jefferies highlighted that approximately 96% of Pershing Square's fee-paying capital is classified as permanent, which mitigates redemption-related outflows and distinguishes it from peers, although its valuation remains above industry averages.
- Potential Risk Factors: BofA analysts pointed out that Ackman's involvement could pose a risk if he reduces his engagement due to retirement or political ambitions, while the concentrated portfolio also presents inherent risks.
- Short-term Catalysts: Citi analysts see potential for short-term upside in asset gathering or performance, particularly regarding the yet-to-be-realized value associated with Howard Hughes-related fees, which could enhance market sentiment.
See More
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- Vipshop Rating Upgrade: UBS upgraded Vipshop (VIPS) from Neutral to Buy, indicating that despite near-term growth pressures, the company's earnings quality and shareholder returns are more attractive, showcasing resilience in a competitive e-commerce landscape.
- Seaport Therapeutics Initiation: JPMorgan initiated coverage on Seaport Therapeutics (SPTX) with an Overweight rating and a price target of $42 for December 2027, reflecting bullish sentiment and highlighting the company's potential for growth in the biotech sector.
- Apple Price Target Increase: Bank of America raised its price target on Apple (AAPL) from $330 to $380, emphasizing significant opportunities in agentic AI, while reiterating a Buy rating, which underscores confidence in the company's future growth trajectory.
- Dave Inc. Initial Rating: UBS initiated coverage on Dave Inc. with a Buy rating and a price target of $300, suggesting that the market underestimates the durability of its high-velocity credit model and earnings growth trajectory, indicating strong future potential.
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