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Photo Credit: Universal Music Group<\/p>\n<\/div>\n
Music Universal Music Group issues a statement on Pershing Square\u2019s unsolicited offer ahead of the Board of Directors completing its review of the proposal.<\/h2>\n
Pershing Square\u2019s proposed $64 billion takeover scheme<\/a> for Universal Music Group (UMG) has the industry buzzing and stocks soaring. But the company\u2019s Board of Directors doesn\u2019t seem too keen on the offer, especially given Pershing\u2019s less-than-complimentary remarks about Lucian Grainge and the label giant\u2019s broader strategy.<\/p>\n In a statement to Digital Music News<\/em>, UMG confirmed that its Board of Directors received the unsolicited proposal from Pershing Square<\/a>, and that \u201ctogether with its advisors, [it] will review the proposal in accordance with its fiduciary duties and analyze its implications for shareholders, employees, artists, songwriters, and other stakeholders.\u201d<\/p>\n \u201cThe Board of Directors has complete confidence in UMG\u2019s strategy and the leadership of Sir Lucian Grainge and the Company\u2019s management team,\u201d the statement continues. \u201cUMG will have no further comment on the proposal until the Board of Directors completes its review.\u201d<\/p>\n \u201cThis is a company with a concentrated shareholder base,\u201d said Pershing Square CEO Bill Ackman<\/a> during a 75-minute conference call this morning. \u201cBollor\u00e9 Group controls 28% of the business. The transaction here requires [a] two-thirds vote of shareholders. [\u2026] Without Bollor\u00e9, we don\u2019t have a transaction.\u201d<\/p>\n He added that his \u201cfirst phone call\u201d yesterday was to Bollor\u00e9 Group, which was apparently pleased with the proposal. As a result, Pershing \u201cdecided to go forward and launch this presentation.\u201d<\/p>\n It remains to be seen if other shareholders will be as gung-ho about the possibility of UMG\u2019s reincorporation. But given that Ackman also mentioned restructuring Grainge\u2019s \u201cmuch too complicated\u201d contract, it seems the company might have an uphill battle ahead of it.<\/p>\n<\/section><\/div>\nNotably, two-thirds of UMG investors must approve the proposal for it to move forward. Existing investors would have the option of trading each of their shares in the current UMG for the \u201cnew\u201d UMG, which would see Pershing up its stake to 11.7%.<\/h4>\n