Pershing Square Holdings (PSH) investor relations material

Deal rationale and strategic fit

• The transaction aims to address UMG's share price underperformance, valuation discount, and lack of capital allocation clarity by merging with Pershing Square SPARC Holdings and relisting as a U.S.-listed entity on the NYSE.

• Seeks to unlock shareholder value, improve investor relations, transparency, and governance, and align capital allocation with best-in-class public companies.

• Listing in the U.S. is expected to broaden the investor base, increase liquidity, and enable inclusion in major indices like the S&P 500.

• Leverages UMG's scale and market leadership to unlock value and accelerate growth while maintaining operational continuity.

Financial terms and conditions

• Shareholders receive €5.05 in cash and 0.77 shares in New UMG per UMG share, valued at €30.40, a 78% premium to the last closing price.

• Transaction involves €9.4 billion in cash, with €2.5 billion from Pershing Square and SPARC, €5.4 billion in new debt, and €1.5 billion from the Spotify stake sale.

• Shareholders may elect all cash, all stock, or a mix, subject to proration.

• 17% of shares will be cancelled, increasing per-share value and maintaining investment grade balance sheet.

• Pershing Square’s ownership rises to 11.7%, and all equity financing is backstopped by Pershing Square.

Synergies and expected cost savings

• Margin expansion expected from operational leverage, AI-driven efficiencies, and a shift to higher-margin revenue streams.

• AI tools like Harvey to drive legal and back-office productivity.

• Cost discipline and focus on fixed overheads to support margin growth.

• Value creation plan includes optimizing capital allocation, increasing share buybacks, and improving financial disclosure.