Billionaire investor Bill Ackman is stepping down from the board of Universal Music Group N.V., the world’s largest music company, as he shifts focus to growing responsibilities at Pershing Square and a new leadership role at Howard Hughes Holdings.
Ackman, the CEO of Pershing Square Capital Management and Chairman of Pershing Square Holdings, officially resigned from UMG’s board following its annual general meeting on Tuesday, ending a three-year tenure that began shortly after the music giant’s public debut in 2021.
“Over the last three years, I have greatly enjoyed being a director of UMG as it has transitioned from a private company into a flourishing public enterprise, the company is extremely well positioned for future growth and profitability under the superb leadership of Sir Lucian Grainge and the entire UMG team.”, Ackman said in a statement.
Ackman’s exit comes as he assumes new responsibilities as Executive Chairman of Howard Hughes Holdings, a publicly traded real estate development firm, alongside his ongoing oversight of Pershing Square’s investment portfolio.
Some context
Universal Music, home to artists such as Taylor Swift, Drake, Billie Eilish, and Nigeria’s rising afrobeats stars like Rema and Ayra Starr, has increasingly attracted investor interest. Still, its share price has remained stagnant since its spinoff from Vivendi in 2021, despite the company’s expansive artist roster and global streaming reach.
In a post on X (formerly Twitter) previously, Ackman reiterated his belief that Universal Music is undervalued, citing its listing on the Euronext Amsterdam exchange as a key reason. He noted that the company’s limited liquidity and exclusion from major U.S. indexes, such as the S&P 500, have prevented it from reaching its full market potential.
“Universal trades at a large discount to its intrinsic value, in significant part due to it not having its primary listing in the U.S.”, Ackman wrote.
His remarks followed reports that UMG was considering relocating its primary stock exchange listing from the Netherlands to the United States. The move is said to be accelerated by recent antisemitic incidents in Amsterdam and could offer the $46 billion company greater visibility and access to institutional capital.
What to know
Ackman, who acquired a 10.25% stake in UMG during its spinoff, became the company’s largest individual shareholder.
His firm, Pershing Square Holdings, had long championed Universal Music as a high-value, capital-light business poised to benefit from the global growth in music consumption.
“UMG’s business can be best thought of as a rapidly growing royalty on the greater global consumption and monetization of music,” Pershing Square’s 2021 investor report read.
Ackman argued then that music provided “the lowest-cost, highest-value” form of entertainment, with significant room for pricing growth and international expansion.
