Billionaire investor Bill Ackman has put forward a takeover proposal for Universal Music Group that values the company at around A$100 billion, triggering a sharp rise in its share price. The offer, led by Pershing Square Capital Management, combines cash and shares in an attempt to acquire the world’s largest music label.

The proposal places a value of roughly A$54 per share on Universal Music, representing an increase of about 78 per cent compared with where the stock was trading before details of the bid emerged. Under the terms outlined, shareholders would receive a mix of cash estimated at around A$16.7 billion along with newly issued shares in the combined entity.

Despite the headline premium, the market reaction has been cautious. Shares have not climbed to the level implied by the offer, suggesting investors are uncertain the transaction will be completed.

A key hurdle lies in securing support from major shareholders. French billionaire Vincent Bolloré, who holds more than 18 per cent of the company, is seen as critical to the outcome. Some analysts believe that without his backing, the proposal is unlikely to proceed.

Ackman has indicated he has already held discussions with Bolloré and described him as interested in the idea. However, there has been no clear indication that this interest will translate into formal support.

The investor argues that Universal Music’s share price has lagged despite strong performance from its core business. He believes the issues holding back the stock are not related to its operations and could be addressed through the proposed transaction.

Among the factors cited are uncertainty surrounding large shareholder stakes, delays in plans for a US listing and what Ackman considers to be limited engagement with investors. His plan would see Universal Music combine with Pershing Square and shift its primary listing to the New York Stock Exchange.

The proposal also includes changes at the governance level, with a refreshed board and new leadership roles being suggested. Adjustments to executive arrangements, including those involving chief executive Lucian Grainge, are also part of the plan.

Universal Music was spun off from Vivendi in 2021 and listed in Amsterdam with a valuation of about A$82 billion. It remains the dominant player in the global music industry, representing major artists such as Taylor Swift, Drake and Lady Gaga.

Following news of the bid, shares in companies linked to Universal Music also moved higher, reflecting renewed investor attention on the sector. However, with several complex elements still unresolved, the future of the proposal remains uncertain.