Invoice Ackman’s Pershing Sq. Capital Administration (PSCM) is closing out an funding fund that held a stake in Common Music Group and is distributing 47 million shares of the music firm to the fund’s co-investors.
The information got here the identical day that Pershing Sq. Holdings, a closed-ended fund owned by PSCM, introduced it had acquired regulatory approval to delist from the Amsterdam Euronext inventory trade.
Pershing Sq. Holdings managed 10.25% of UMG’s inventory on the finish of 2023, in response to UMG’s annual report for the yr. The 47 million shares that Pershing Sq. is distributing quantity to 2.6% of UMG’s excellent shares. After the distribution, the funding firm will nonetheless maintain 140 million shares, or 7.6% of UMG, Pershing Sq. stated in an announcement on Thursday.
“The PSVII funds have elected to distribute UMG inventory to their restricted companions quite than money as a result of we imagine that UMG inventory is considerably undervalued at its present share value, and the tax-free inventory distribution permits our restricted companions to proceed to personal UMG shares,” Pershing Sq. stated.
At UMG’s present inventory value, the PSVII distribution is value approx. EUR €1.14 billion (USD $1.17 billion), and Pershing Sq.’s remaining stake in UMG is valued at round €3.395 billion.
Pershing Sq. acquired its 10% stake in UMG in the summertime of 2021 by way of a sequence of transactions. The funding firm says the PSVII funds, which purchased UMG at €18.28 per share, have acquired dividends of €1.66 per share over the course of the almost four-year funding.
“The PSVII funds have elected to distribute UMG inventory to their restricted companions quite than money as a result of we imagine that UMG inventory is considerably undervalued at its present share value.”
Pershing Sq.
At UMG’s closing value of €24.72 on December 31, 2024, the file main has achieved a complete return of 46%, together with dividends, over that point, Pershing Sq. stated.
“This return compares favorably to the S&P 500’s 37% return and the Amsterdam Change Index’s return of 21% over the identical interval,” the corporate famous.
In the meantime, the corporate introduced that it has acquired the inexperienced mild to delist Pershing Sq. Holdings from the Amsterdam Euronext trade – the identical trade the place UMG is traded – on the finish of this month. Pershing Sq. introduced Thursday that its final day of buying and selling on the Amsterdam bourse will likely be January 30, and it is going to be delisted on January 30.
Shareholders will nonetheless be capable of commerce their shares on the London Inventory Change (LSE), the corporate stated.
Ackman’s determination to take away Pershing Sq. from the Amsterdam trade adopted an outburst of violence within the metropolis throughout a match between the native Ajax soccer membership and Maccabi Tel Aviv in November. Israeli guests and Jewish individuals had been reportedly assaulted within the streets, in an incident some described as a pogrom.
Ackman, an outspoken supporter of Israel, stated in a put up on X in November that the violence in Amsterdam was the “tipping level” for the choice to delist from the town’s inventory trade.
“Concentrating the itemizing on one trade, the LSE, and leaving a jurisdiction that fails to guard its vacationers and minority populations, mix each good enterprise and ethical rules. We are able to additionally get monetary savings and enhance liquidity for shareholders in addition,” Ackman wrote.
Ackman has additionally been pushing for Common Music Group to shift from the Amsterdam trade to New York, arguing the transfer would supply “extremely materials advantages” to UMG buyers, and arguing that Pershing Sq. has a “contractual proper to trigger UMG to be listed within the US.”
Nevertheless, UMG seems to be resisting Ackman’s proposal, arguing that Ackman has the suitable to request, however not order, the corporate to shift to a US itemizing.
Pershing Sq. Capital Administration was valued at round USD $10 billion earlier this yr, after a bunch of funding corporations acquired a 10% stake within the firm.
Following that blockbuster deal, pleasure grew across the launch of Ackman’s new US-headquartered Pershing Sq. USA. Nevertheless, after dramatically lowering the funding startup’s IPO value goal, Ackman scrapped Pershing Sq. USA’s IPO this previous summer season, citing investor uncertainty.Music Enterprise Worldwide
