Bolloré (AO) | Hold | Bolloré sings a different song on UMG

Research evidence excerpt

Bolloré (AO) | Hold | Bolloré sings a different song on UMG

EUR27-28/share, which he suggested could potentially justify a partial disposal of the stake in the future.

Beyond valuation, Cyrille Bolloré also criticized the structure and industrial rationale of the proposal itself. According to him,

Pershing Square is not financing the transaction with its own capital, but rather through UMG’s own balance sheet and leverage

capacity. He also questioned the strategic logic of relocating UMG’s primary listing to the United States and openly expressed

doubts regarding the compatibility between Bill Ackman’s activist approach and UMG’s current management culture.

On the surface, the rejection could be perceived negatively for UMG’s short-term share price, as Pershing’s proposal had

contributed to a rebound in the stock since April by reviving speculation around strategic optionality and a potential narrowing of

UMG’s valuation discount versus US peers. However, the proposal has nevertheless already had indirect effects on UMG’s capital

allocation policy. Since the offer became public, UMG has doubled its share buyback program and reduced part of its Spotify

stake, measures that had also been advocated by Pershing Square, although management indicated these decisions had been

planned beforehand.

More broadly, Bolloré’s long-term intentions regarding UMG remain somewhat difficult to fully interpret. While Cyrille Bolloré

strongly defended the strategic quality of the asset during the AGM, there have also been periodic market indications that the

group could eventually monetize part of its position at higher valuation levels. At this stage however, the AGM comments clearly