Universal Music Group has outlined plans to reduce its holding in Spotify while stepping up share buybacks, moves that appear aimed at addressing concerns about its market valuation following a proposal from billionaire investor Bill Ackman.

The company confirmed it intends to sell half of its stake in the streaming platform and has expanded its share repurchase program to A$1.67 billion. Once an earlier A$835 million buyback announced in March is completed, Universal plans to launch a further A$835 million round.

Ackman, whose firm Pershing Square holds more than 4.5 per cent of Universal’s shares, has been pushing for changes to unlock value. His proposal places the company’s worth at around A$108 billion and includes plans to offload the entire Spotify stake to generate about A$2.9 billion after tax and artist payments.

Chief executive Lucian Grainge said the company would not comment in detail on the proposal until its board has finished reviewing the offer.

Universal reported solid growth in its latest quarterly results, with subscription revenue rising 12.5 per cent on a constant currency basis to roughly A$2.17 billion. That figure exceeded analyst expectations, which had pointed to growth of 10.1 per cent. Overall revenue increased 8.1 per cent to about A$4.84 billion.

The gains were supported by higher subscription pricing, as well as the company’s Streaming 2.0 strategy, which focuses on increasing revenue per user through premium tiers and stronger engagement with dedicated fans. The recent acquisition of Downtown Music also contributed to the result.

Recorded music revenue, which includes income from both paid subscriptions and advertising-supported streaming, reached approximately A$3.76 billion for the quarter, broadly matching forecasts.

Top-performing artists during the period included BTS, Olivia Dean, Taylor Swift and Morgan Wallen, along with the soundtrack for KPop Demon Hunters.

Ackman’s broader plan involves combining Universal with a US-listed acquisition vehicle and shifting the company’s primary listing to New York. He has argued that the current structure undervalues the business and has called for changes to financial reporting.

Universal had previously considered a US listing but abandoned those plans earlier this year, citing market uncertainty that it said had affected its valuation.

As one of the largest music companies globally, alongside Sony Music and Warner Music Group, Universal controls more than 30 per cent of the recorded music market. Any major strategic shift would require backing from key investors, including Vincent Bollore, who holds more than 18 per cent of the company through his family interests.

Universal’s board has said it will assess the proposal before making a decision, with further updates expected once that process is complete.

The company’s share price has declined 23 per cent over the past year, reflecting slower growth in streaming and subscription services as well as concerns about the impact of artificial intelligence on the music industry. Although the stock rose following Ackman’s proposal, it remains below the A$50.70 per share valuation he has suggested.

Music companies are navigating a changing environment as they explore ways to monetise AI while protecting their catalogues. In recent months, the industry has moved towards collaboration with technology firms, including Universal’s partnership with Nvidia to support AI-driven music discovery and production.

Meanwhile, Spotify has faced its own challenges. The streaming platform recently disappointed investors with its operating income outlook and continues to deal with competition from major technology players. It also lifted the price of its premium subscription in the United States by 8 per cent earlier this year to about A$20 per month, raising questions about how much consumers are willing to pay.