Universal Music Group, the entertainment behemoth that counts Taylor Swift, Sabrina Carpenter, and Kendrick Lamar among its roster of talent, has politely - or perhaps not so politely - rejected a $64.3 billion (£48 billion) takeover bid from billionaire Bill Ackman's Pershing Square investment firm.
The music giant stated that the offer was "not in the best interests" of the company, its shareholders, artists, fans, and other stakeholders - which is a diplomatic way of saying "thanks, but we think you're lowballing us." Universal added that the bid "fundamentally and materially undervalues" the business, which also owns the legendary Abbey Road Studios and labels such as EMI and Island Records.
Pershing Square, which already holds a stake in Universal, declined to comment on the rejection - presumably because they were too busy calculating their next move.
The takeover bid, launched in April, aimed to move the world's largest music company from its current listing on the Euronext Amsterdam stock exchange to a new listing in America. At the time, Ackman promised to revitalize Universal's share price, which he claimed had "languished" due to financial issues unrelated to the music business's actual performance.
Ackman pointed fingers at an 18% stake held by Bolloré Group, the family conglomerate of billionaire Vincent Bolloré, and a recent decision to delay listing Universal's shares on the New York Stock Exchange. Cyrille Bolloré, CEO of Bolloré Group, had opposed the offer, arguing it undervalued Universal - a sentiment the company's board clearly shares.
Universal's board expressed full confidence in the strategy of CEO and chairman Sir Lucian Grainge, and promised "enhanced financial disclosures" in the future so that the company's value can be "better assessed and understood." Grainge, for his part, reaffirmed the company's commitment to leading the global music industry through innovation, signing top stars, and deepening fan engagement.
"As we execute our strategy and deliver maximum long-term value, we look forward to providing shareholders with greater insight into the drivers of our performance and future direction of our business," Grainge said, presumably while humming a Taylor Swift chorus.
Global music revenues have been on the rise, thanks to streaming subscriptions providing a lifeline to an industry long battered by piracy and financial decline. However, a heated debate continues over how much streaming platforms pay in royalties. And as if that weren't enough, the industry is now battling a surge in deepfakes - AI-generated songs by fraudsters impersonating artists - which are flooding platforms and giving lawyers headaches.