Bill Ackman sees PSPC deal with Universal Music closes later this month

Bill Ackman sees PSPC deal with Universal Music closes later this month

Bill Ackman, Founder and CEO of Pershing Square Capital Management.

Adam Jeffery | CNBC

Billionaire investor Bill Ackman said on Friday he plans to complete his PSPC deal to buy 10% of Universal Music Group for around $ 4 billion later this month.

Ackman’s Blank Check Company Pershing Square Tontine Holdings (PSTH) is expected to complete transaction by June 22, investor told CNBC Scott Wapner. French press company Vivendi, a majority shareholder of Universal Music controlling 80%, is due to hold its general meeting that day.

Ackman said he’s excited about the deal and believes he’s getting a share of the No.3 player in the space at a discounted price.

The deal values ​​Universal Music at 35 billion euros (roughly $ 42.4 billion). This will not result in a merger and Universal Music will proceed with a scheduled listing on Euronext Amsterdam in the third quarter of 2021.

The deal would leave $ 1.5 billion of residual cash in Ackman’s SPAC, which would be integrated with a SPARC, a special-purpose acquisition rights company, the first of its kind, for another acquisition down the road. .

Unlike a traditional SPAC where investors commit capital without knowing the target company, Ackman will notify SPARC investors of the potential acquisition before pledging funds. In other words, investors can participate if they like the deal and walk away if not.

Ackman’s hedge fund will own around 30% of SPARC, which will remain listed on the NYSE but will no longer be treated as a SPAC under the exchange’s listing rules.

SPARC will have a minimum of $ 6.6 billion in cash and up to about $ 10.6 billion for the next transaction.

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