Pershing Square Tontine Holdings, a blank-cheque company led by hedge-fund manager William Ackman, said it won’t proceed with its proposed acquisition of a 10% stake in Universal Music Group and will assign its share-purchase deal to Pershing Square Holdings.
Vivendi SE — Universal’s majority owner — said it approved Pershing Square Tontine’s request to assign its rights and obligations under a June 20 agreement to investment funds with significant economic interests or management positions held by Ackman.
The French media company said the equity interest eventually acquired in Universal Music will now be between 5% and 10%. If it falls below 10%, Vivendi said it would still sell the additional interest to other investors before the planned spinoff of Universal Music into an Amsterdam-listed company in September.
On 20 June, Pershing Square Tontine agreed to buy 10% of the ordinary shares of Universal Music in a deal valuing the world’s largest music company — home to stars including Taylor Swift, Billie Eilish, Queen and the Beatles — at about $40bn.
Pershing Square Tontine said its decision to withdraw from the deal was prompted by issues raised by the US Securities and Exchange Commission. The company said its board didn’t believe the deal could have been completed given the SEC’s position.
The blank-check company said its board concluded that assigning its Universal Music stock-purchase deal to Pershing Square was in the best interest of shareholders. Pershing Square Tontine said Pershing Square intends to be a long-term Universal Music shareholder.
Pershing Square Tontine said it would seek a new transaction, which will be structured as a conventional special purpose acquisition company merger. The company said it has 18 months remaining to close a deal.
This article was published by Dow Jones Newswires