Bill Ackman Billionaire Investor SPAC Set to Buy 10% of Universal Music, Report Says
- Bill Ackman’s SPAC is about to buy 10% of Universal Music, the Financial Times reported.
- The investment from Pershing Square Tontine Holdings could value the music group at $ 40 billion.
- Universal Music, a division of Vivendi, raked in $ 9 billion in revenue last year.
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Billionaire investor Bill Ackman’s Specialty Acquisition Company (SPAC) is set to buy 10% of Universal Music Group in a deal valuing the music titan at $ 40 billion, has the Financial Times reported Thursday.
Ackman’s Pershing Square Tontine Holdings could finalize the mega-deal in days or weeks, although it could still fail, sources told the Financial Times. Ackman beat a rival suitor, private equity group Hellman & Friedman, by increasing its bid this week, the newspaper reported.
Ackman’s ongoing deal with Universal Music was first reported by The Wall Street Journal. PSTH shares fell as much as 8% in aftermarket trading after the news broke.
Universal Music, which works with artists such as Taylor Swift and Billie Eilish, is currently owned by Vivendi, a French media conglomerate. The segment increased revenue at constant currencies by 5% to 7.4 billion euros ($ 9 billion) last year, and operating profit by 20% to 1.4 billion euros. euros, according to Vivendi’s latest annual report.
The Financial Times, citing a source familiar with the situation, said Vivendi sees a SPAC listing as a way to market Universal Music before launching the company on the Euronext stock exchange later this year.
Vivendi revealed in mid-May that it was planning to sell 10% of Universal Music to an “American investor” – which could be Ackman – or to pursue a public offering of 5% to 10% of the shares in the segment. Tencent, a Chinese tech conglomerate, doubled its stake in Universal Music to 20% last year, valuing the company at 30 billion euros.
Ackman, the boss of Pershing Square Capital Management, said last month that his team identified an “iconic, phenomenal and formidable company” in November 2020, and he hoped to strike a deal to buy part of it in the coming weeks. . He said the target was so attractive and interesting that it was worth “the energy and the effort”.
The hedge fund manager went public with the PSTH last summer with the aim of spending about $ 5 billion on a minority stake in a private company. Ackman’s reputation as a leading investor – bolstered by its lucrative pandemic coverage and the 70% gain of its fund last year – and the size of its PSPC have fueled intense speculation about its possible target. .
Pershing Square Capital Management declined a request for comment from Insider.