Bill Ackman's Pershing Square, which owns 10.25% of Universal Music Group (UMG), is pushing for the company to leave the Euronext Amsterdam and establish a primary listing in the United States. However, UMG has clarified its position on this matter.

According to UMG's formal statement, Pershing has the right to request a U.S. listing only if a Pershing entity sells at least $500 million in UMG shares as part of the listing. However, Pershing cannot require UMG to become U.S.-domiciled or delist from Euronext Amsterdam.

Ackman argues that UMG's current stock performance suffers from:

• Limited liquidity
• Ineligibility for S&P 500 and other index inclusion
• Trading at a significant discount to intrinsic value

UMG's response indicates they will:

• Honor contractual obligations regarding a U.S. listing process
• Base any additional decisions on maximizing value for all shareholders
• Consider the best interests of the company as a whole

Pershing Square has a successful history of activist investing, notably with the Tim Hortons spinoff from Wendy's in 2004. In that case, Pershing Square's strategy involved:

• Hiring Blackstone to create a valuation report
• Demonstrating potential doubled value through spinoff
• Achieving their goal within six weeks

While Ackman plans to pursue a U.S. listing for UMG "no later than next year," the company's ultimate decision about changing its domicile will depend on demonstrable benefits for all shareholders.

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