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Mystery US investor interested in 10% of Universal Music revealed to be Bill Ackman-led SPAC

By | Published on Friday 4 June 2021

Universal Music

The mystery American entity that might acquire 10% of the Universal Music Group ahead of its upcoming stock market listing is a special purpose acquisition company run by activist investor and hedge fund manager Bill Ackman. So now you know. And don’t go claiming you don’t. Because you do. We just told you. I saw you reading it. There’s no going back now.

Current UMG owner Vivendi is getting ready to list the world’s biggest music rights company on the Dutch stock exchange. 60% of the shares in the spun off Universal Music business will then be distributed to Vivendi’s current shareholders. 20% is already owned by a consortium of investors led by Chinese web giant Tencent. Vivendi itself was expected to keep hold of the other 20%.

Except last month Vivendi announced that, while it would definitely be retaining at least 10% of UMG post stock market listing, it might actually flog off the other 10% to an unnamed “American investor”.

Yesterday, the Wall Street Journal reported that this “American investor” was in fact the Ackman-led Pershing Square Tontine Holdings, a special purpose acquisition company launched on the New York Stock Exchange last November. Special purpose acquisition companies – aka SPACs or blank cheque companies – list themselves on stock exchanges with no active operations, raising money on the markets with the specific aim of then acquiring other businesses.

Following the WSJ report, Vivendi put out a new statement confirming that it was indeed Akman’s investment entity that it was busying talking to regarding the sneaky flogging off of 10% of UMG prior to any stock market listing.

“Vivendi and Pershing Square Tontine Holdings Ltd, represented by Chief Executive Officer Bill Ackman, have entered into discussions for Vivendi to sell 10% of the Universal Music Group share capital to PSTH, prior to the distribution of 60% of the UMG shares and its listing”, it said this morning. “This transaction would be based on an enterprise value of 35 billion euros for 100% of the UMG BV share capital, subject to the authorisation given by Vivendi shareholders at the 22 Jun 2021 Shareholders’ Meeting, to distribute 60% of the UMG share capital and list the company”.

Vivendi also added that, assuming this deal goes through, Pershing Square Tontine Holdings, and its affiliates, might then look to further boost their stake in UMG, either by buying up more stock from the Vivendi shareholders who will soon be UMG shareholders too, or by buying into Vivendi.

Ackman’s SPAC also confirmed the talks with Vivendi, with Ackman himself stated: “Universal Music Group is one of the greatest businesses in the world. Led by Sir Lucian Grainge, it has one of the most outstanding management teams that I have ever encountered. Importantly, UMG meets all of our acquisition criteria and investment principles as it is the world’s leading music company, with a royalty on the growing global demand for music. We are delighted to work with Vivendi on this iconic transaction, and look forward to its consummation”.