Ackman's SPAC takes Universal Music Group stake in $4B deal
Universal Music Group represents artists including Billie Eilish and Drake
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Billionaire hedge fund manager Bill Ackman has agreed to buy 10% of Universal Music Group for about $4 billion.
Ackman’s special-purpose acquisition company (SPAC) Pershing Square Tontine Holdings will purchase the minority stake in Universal Music Group, which represents artists including Billie Eilish and Drake, from French conglomerate Vivendi SE.
The deal, which is based on an enterprise value of 35 billion euros ($41.55 billion), is expected to close no later than Sept. 15, 2021.
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Universal Music Group will be spun-off from Vivendi and listed on the Euronext Amsterdam Exchange in September. Tontine will distribute UMG shares to its shareholders once the company is listed on the exchange.
"The arrival of major American investors provides further evidence of UMG’s global success and attractiveness," Vivendi said in a statement. A consortium led by Chinese internet giant Tencent in December raised its stake in UMG to 20%.
A Pershing Square spokesperson declined to comment.
In an unusual move, Tontine will remain as a public company following the transaction, under the name RemainCo, and will look for another transaction where it can spend up to $2.9 billion cash.
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Tontine last year became the largest SPAC of all-time, raising $4 billion through an initial public offering. In addition, Ackman’s Pershing Square Holdings committed at least $1 billion.