A Bill Ackman SPAC is Buying 10% of Universal Music Group

Wall Street learned this week that a blank-check firm backed by billionaire Bill Ackman has agreed to acquire 10% of Universal Music Group.

The deal would equate to the purchase being about $4 billion from French media company Vivendi SE.

Universal Music Group (UMG) claims to have the rights to the world’s largest collection of music, which includes artists Kanye West, Taylor Swift, Ariana Grande, Billie Eilish and Justin Bieber.

This is the second big investment in UMG in recent months as a group of investors led by Chinese streaming giant Tencent Music (TME) bought a 20% stake in 2020.

Ackman’s Pershing Square Tontine Holdings Ltd., said the transaction would value Universal Music Group at 35 billion euros ($42 billion) including debt.

Both companies had reached an agreement despite backlash from Vivendi’s shareholders and disappointment from investors of Pershing Square Tontine.

Pershing Square Tontine will remain listed with about $1.5 billion in cash and access to an additional $1.4 billion with the Pershing Square Funds after the deal. It will continue to search for a new business combination, according to its statement this past weekend.

The SPAC said it intends to distribute the Universal Music shares to its investors after the music business’s planned public listing in Amsterdam later this year.

Vivendi’s investors will receive 60% of Universal’s shares.

“After the 20% equity stake acquired by the Consortium led by the Tencent group, the arrival of major American investors provides further evidence of UMG’s global success and attractiveness,” Vivendi said in a separate statement Sunday.

The transaction is set to close in the coming weeks, and at the latest by Sept. 15, according to Vivendi.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.