Bolloré urges Universal Music Group to reject Bill Ackman’s $64B takeover bid

Bolloré Group chief Cyrille Bolloré publicly urged Universal Music Group to reject Bill Ackman’s takeover proposal, adding a major shareholder’s opposition to the deal.

Reuters reported on May 27 that Bolloré said the proposal undervalues UMG and does not fit the company’s long-term strategy. The objections were also centered on the structure of the deal and the management fit.

UMG confirmed on April 7 that it had received Pershing Square’s unsolicited, non-binding proposal and that its board would review it in line with its fiduciary duties.

Bolloré’s official site identifies the group as a major UMG shareholder, with an 18.5% stake listed among its participations.

The public rebuke matters because it comes from one of UMG’s largest shareholders and raises the hurdle for a takeover that was already only at the proposal stage. Reuters reported the bid at about $64.3 billion when it was first disclosed in April.

What happens next will depend on whether other large shareholders weigh in, and whether UMG or Pershing Square responds to the criticism.

Background

Ackman’s Pershing Square proposal was disclosed on April 7 as an unsolicited cash-and-stock bid for UMG. The company said at the time that its board would review the offer.