Pershing Square Tontine Holdings agree $4bn deal for 10% of Universal Music Group

Pershing Square Tontine Holdings agree $4bn deal for 10% of Universal Music Group

The majority owner of Universal Music Group, Vivendi, has confirmed the signing of an agreement with Pershing Square Tontine Holdings, Ltd. (PSTH) – a special purpose acquisition company (SPAC) led by William Ackman – for the sale of 10% of the share capital of Universal Music Group (UMG BV) for approximately $4bn. 

The transaction is based on an enterprise value of €35 billion for 100% of UMG’s share capital, with an official Vivendi press release revealing that the deal is set to be finalised by September 15, 2021.

Vivdendi stated: “The closing of the transaction is subject to the continued participation of PSTH shareholders after they are afforded customary redemption rights, and completion of US regulatory processes, and is expected to take place in the coming weeks, and at the latest by September 15, 2021.”

Tencent acquired a 20% equity stake in January 2021, based on an enterprise value of €30 billion for UMG. As a result of that deal, the Vivendi Management Board announced plans for the distribution of 60% of Universal Music Group’s share capital to Vivendi shareholders. The listing of the shares of a UMG holding company – currently being incorporated in the Netherlands – will be applied for on the Euronext stock exchange in Amsterdam.

The new Vivendi press release stated that at the June 22, 2021 Shareholders’ Meeting “Vivendi’s Management Board will propose the distribution of 60% of UMG’s share capital to Vivendi shareholders and the listing of the company on the Euronext Amsterdam stock exchange towards the end of September.”

In an official press release, PSTH stated: “PSTH will continue to exist following these transactions and expects to have approximately $1.5 billion in cash and access to an additional $1.4 billion in cash through forward purchase agreements. PSTH intends to pursue a business combination with an operating business promptly.”

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