Bill Ackman’s Spac closes in on $40bn deal with Universal Music
Billionaire Bill Ackman’s blank-cheque company is closing in on a deal to buy a 10 per cent stake in Universal Music Group for roughly $4bn (£2.8bn).
Pershing Square Tontine Holdings is in talks with Universal’s French owner Vivendi over the deal, which would value the record label at around $40bn.
Vivendi, controlled by billionaire Vincent Bollore, is planning to cash in on Universal by distributing 60 per cent of its capital to investors through a stock market float.
If confirmed, the Spac deal will take place before the label is listed on the Euronext exchange in Amsterdam.
Universal, the world’s biggest music company, is home to stars including Taylor Swift and Lady Gaga.
Vivendi is looking to cash in on its prize asset as the rise of streaming services such as Spotify has revived the industry and driven up the value of music assets.
With a valuation of $40bn, Universal is more valuable than its parent company. Chinese tech giant Tencent holds a 20 per cent stake in the label.
Ackman has been one of the pioneer’s of the global Spac craze. In July last year Pershing Square raised $4bn in what was the largest ever initial public offering for a blank-cheque firm.
The hedge fund manager described Universal as “one of the greatest businesses in the world”.
However, shares in Pershing Square fell as much as six per cent in after-hours trading as investors reacted sceptically to the mooted deal. Vivendi’s shares opened higher but slipped 0.4 per cent in early trading.