Ackman’s Pershing Square in talks to buy 10% of Universal Music

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Billionaire William Ackman’s Pershing Square Tontine Holdings (PSTH.N) is in talks to buy 10% of Universal Music Group for around $ 4 billion, label owner Vivendi confirmed on Friday.

Vivendi, controlled by French billionaire Vincent Bolloré (BOLL.PA), plans to monetize its crown jewel UMG, the world’s largest music label with artists like Taylor Swift, by ceding the entity to its existing shareholders.

Vivendi said the deal with Ackman’s specialist acquisition company (SPAC) would give UMG an enterprise value of 35 billion euros ($ 42.4 billion).

“Universal Music Group is one of the largest companies in the world,” said Bill Ackman, CEO of PSTH, in a joint statement.

Vivendi shares rose 0.7% at the start of the session.

Shares of Pershing Square Tontine Holding fell almost 6% to $ 23.5 per share in aftermarket trading, close to its initial public offering (IPO) of $ 20, after the market broke. potential agreement. The closer SPAC shares trade to their IPO price, the more skeptical investors are about making a deal.

PSPCs such as Pershing Square Tontine are raising funds in an IPO with the aim of merging with a private company. For the private company, the process is an alternative to listing its shares through an IPO.

Almost a year ago, in July 2020, Pershing Square raised $ 4 billion in what was the largest IPO of a blank check company.

Guggenheim Investments, hedge fund The Baupost Group and Wells Capital Management are among the biggest investors in Pershing Square Tontine.

Universal Music is majority-owned by French media giant Vivendi, which said last month that the music label’s equity was 33 billion euros ($ 40 billion), more than the market value of mother Society. Tencent Holdings owns an approximate 20% interest in Universal. Read more

Vivendi explored Universal’s IPO, notably through a traditional IPO.

In documents published ahead of Vivendi’s general meeting scheduled for June, Vivendi said that Universal was attracting the interest of potential investors and that it could sell part of its stake to a “strategic partner” before the distribution of the shares. actions of Universal.

At the time, Vivendi announced its intention to retain a stake of at least 10% in the company for a long period.

“Universal Music is a business that can be valued without speculating on its future,” said Erik Gordon, professor of commerce at the University of Michigan. “The terms of the PSPC Tontine are also better than those of most PSPCs.”

($ 1 = 0.8258 euros)

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Shawn Beecher

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