Ackman’s Universal bruising proves activism limits
BREAKINGVIEWS-Ackman’s Universal bruising proves activism limits The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
By Jennifer Johnson
LONDON, June 5 (Reuters Breakingviews) - The Rolling Stones, one of the many acts signed to a Universal Music Group-owned label, famously sang "you can't always get what you want". Bill Ackman has learned that the hard way. The hedge fund manager was hoping to purchase the record company for around $64 billion in April – but was predictably rebuffed by its most powerful shareholder, Vincent Bolloré. Now, Ackman has offloaded his remaining stake in the company for a very modest return. The saga proves that even the loudest activist investors need to find someone who is willing to listen.
Veteran corporate raider Bolloré – who holds some 18% of Universal Music UMG.AS via his family vehicle and a further 13% through his Vivendi VIV.PA conglomerate – was always likely to be an obstacle. Last month, his son Cyrille urged the Amsterdam-listed group's shareholders to reject Ackman’s approach on the grounds that it undervalued the business, adding “he is not making an offer with his own money”. It’s perhaps a fair criticism, given the cash-and-stock proposal relied in part on Universal Music taking on €5.4 billion of debt and selling its Spotify Technology SPOT.N stake, with the proceeds effectively put towards a share repurchase.
Though he first invested in 2021, Ackman’s campaign at Universal Music effectively began three years later, when he started pushing the company to move away from its European base. The board responded by saying Ackman’s Pershing Square fund could request a U.S. listing, but couldn’t force the group to become domiciled there, nor to delist from the Amsterdam stock exchange. In his eventual takeover pitch, Ackman also claimed the record company’s balance sheet was underutilised, and that uncertainty over the future of the Bolloré family’s stake was weighing on the shares.
In hindsight, tangling with the tycoon who controls a decisive 40% of Universal Music’s voting rights may not have been the wisest call. After the younger Bolloré’s intervention, and the board’s unanimous rejection of the bid, it was time for Ackman to face the music. On June 3, Bloomberg News reported that his Pershing Square fund would offload its 80.6 million shares in an overnight placing, with Bank of America marketing them in a range of €17.66 to €18.62 apiece. Calculations by Breakingviews suggest that Pershing Square captured more than €900 million in profit across the life of its Universal Music investment, which began in 2021 with the purchase of roughly €3.4 billion worth of shares. Pershing Square received roughly €350 million in dividends, distributed around €1.2 billion worth of shares to partners when that vehicle was wound down, and raised a further €2.7 billion from two share sales in March 2025 and the one this week.
Yet when factoring in dividends and distributions, this only corresponds to a 6% internal rate of return. That's hardly a show-stopping performance. Nor is it Ackman’s first public clanger. A failed bet on drugmaker Valeant led to a roughly $4 billion loss in 2017, while a short on nutritional supplement group Herbalife also backfired spectacularly. The Universal Music saga isn't the hedgie’s most embarrassing outing. But it is further proof that his aggressive activist tactics don't reliably deliver results.
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CONTEXT NEWS
Universal Music Group said on June 4 that it had repurchased some of the shares sold by Bill Ackman's Pershing Square after the billionaire investor's takeover bid for the record label was rejected.
According to Bloomberg News and the Wall Street Journal, Pershing Square was seeking to sell around 80.6 million Universal Music shares in an overnight placing on June 3.
Ackman first invested in Universal Music in 2021 and joined its board in 2022. But he became frustrated with the company's weak share price, Bolloré's influence, and the company's decision to postpone a U.S. listing. He resigned from the board in 2025, citing new executive and board responsibilities from recent investments.
(Editing by Aimee Donnellan; Production by Streisand Neto)
((For previous columns by the author, Reuters customers can click on JOHNSON/Jennifer.Johnson@thomsonreuters.com))
