Bill Ackman restructures Universal Music Group deal

Bill Ackman restructures Universal Music Group deal

The acquisition of 10% of Universal Music Group by Bill Ackman has been restructured following push-back from regulators and investors to the plan.

The hedge fund billionaire had planned to acquire the stake valued at €3.5 billion in UMG via a special purpose acquisition company (SPAC), Pershing Square Tontine Holdings. 

“Our decision to seek an alternative initial business combination (IBC) was driven by issues raised by the SEC with several elements of the proposed transaction - in particular, whether the structure of our IBC qualified under the NYSE rules,” Pershing said in a note to investors. “Yet, despite the inability of PSTH to consummate the UMG transaction, our counterparty was not left at the altar. Pershing Square will be fulfilling PSTH’s commitment to Vivendi.”

In a separate statement, UMG parent Vivendi confirmed that the deal will still go ahead via Ackman’s investment funds rather than PSTH.

“The equity interest eventually acquired in UMG will now be comprised between five and 10%,” said a Vivendi statement. “If it were less than 10%, Vivendi still intends to sell the shortfall to other investors before the distribution of 60% of the share capital of UMG to the shareholders of Vivendi scheduled to occur on September 21, 2021.”

Vivendi has already sold 20% of UMG’s share capital to Tencent Holdings. The major is set to go public in Amsterdam.

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