Universal Responds to Bill Ackman’s Call to Shift Listing From Amsterdam to US

Bill Ackman, CEO of Pershing Square Capital, speaks at the Wall Street Journal Digital Conference in Laguna Beach, Calif., on Oct. 17, 2017. Mike Blake/Reuters

Universal Music Group (UMG) responded to a recent suggestion made by its billionaire board member Bill Ackman that the company delist from Amsterdam’s Euronext stock exchange next year.

Ackman made his suggestion following a clash on the streets of Amsterdam between pro-Palestinian protesters and Israelis after a soccer match on Nov. 7. Around 60 people were arrested during the incident.

In a Nov. 8 X post, Ackman said he has “begun the conversation” with UMG about shifting the domicile and listing of UMG to the United States from the Netherlands.

UMG said in a Nov. 9 statement that neither the company nor any of its other board members were “involved in the formulation of the views in that post.”

Ackman said that Pershing Square Holdings (PSH), an investment holding company he manages, has a “contractual right” to get UMG listed in the United States. “We will exercise this right and achieve a US listing for UMG no later than some time next year,” he said.

UMG noted that while PSH has the right to request a listing in the United States, it “does not have any right to require UMG to become a US domiciled company or delist from Euronext Amsterdam.”

“The company will endeavor in good faith to comply with its contractual obligations with respect to undertaking the process of a US listing at the request of Pershing.”

However, any actions or decisions beyond those necessary to comply with these obligations will only be taken after considering the best interests of the corporation’s shareholders, UMG said.

To request a listing in the United States, PSH has to first sell at least $500 million worth of UMG shares, the music company noted.

PSH bought an initial 7.1 percent stake in UMG in August 2021. Later that month, a PSH affiliate bought a 2.9 percent stake, raising his total stake in UMG to 10 percent.

UMG shares haven’t performed well over the past years. On Sept. 24, 2021, UMG shares traded at 23.45 euros. On Nov. 8, 2024, it was trading at 23.71 euros. During this period, it has largely moved in a range of around 17 euros to 29 euros.

UMG Performance

In an August report detailing the interim financial performance of its stock holdings, PSH pointed to revenue issues facing UMG.

While overall revenues and income grew in the recent second quarter, both subscription and streaming revenues decelerated, shifting from double-digit to mid-single digit growth, PSH noted.

“We believe the quarter’s disappointing subscription and streaming growth is due to certain idiosyncratic factors unique to UMG combined with some weakening in the overall economic environment,” the report said.

PSH believes UMG’s Q2 underperformance “will prove to be short-term in nature and does not impact our view of UMG’s medium and long-term growth prospects.”

When AI technologies started getting attention, investors overreacted as to how this development could negatively impact UMG, PSH said. However, UMG shares quickly recovered once investors gained more knowledge of AI risk, it noted.

“We believe that as investors better understand UMG’s path to higher revenue growth and regain confidence in the long-term health of the industry, the company’s share price is likely to increase significantly from its current levels.”

In addition to UMG, Ackman also proposed delisting PSH from the Amsterdam exchange, noting that the investment group’s listing on the London Stock Exchange makes up more than 90 percent of the stock’s trading.