Bill Ackman’s Pershing Square drops deal to buy 10% of Universal Music

Bill Ackman’s blank check firm, Pershing Square Tontine Holdings, said on Monday it had abandoned a deal to buy 10% of Vivendi’s flagship group, Universal Music.

Ackman’s SPAC agreed last month to buy 10% of the French media group’s crown jewel for around $ 4 billion.

Vivendi shareholders recently backed the spin-off of Universal which gave the company an enterprise value of 35 billion euros ($ 41.55 billion). The music company is home to stars such as Taylor Swift and Lady Gaga.

However, Pershing announced on Monday that its board of directors had unanimously decided not to proceed with the purchase after discussions with the U.S. Securities and Exchange Commission (SEC).

“Our decision to seek another initial business combination (” IBC “) was prompted by questions raised by the SEC with several elements of the proposed transaction – in particular, whether the structure of our IBC qualified under the rules of the NYSE, “Ackman said in a letter to shareholders, released Monday.

Pershing Square said that in light of its experience with the proposed deal with UMG, it would now pursue a “classic” SPAC merger. He has 18 months to complete a new transaction unless shareholders vote for an extension.

“While we are disappointed with this outcome, we continue to believe that PSTH’s unique scale and supportive structure will allow us to find a transaction that meets our standards for business quality, sustainable growth and fair pricing.” , Ackman said.

The Pershing share price has fallen 18% since the announcement of the UMG buyout on June 4, and Ackman said he underestimated shareholder reaction to the “complexity and structure” of the transaction.

Despite abandoning the deal, Pershing insisted that Vivendi was not “left at the altar” and reaffirmed that he still intends to become a long-term shareholder of UMG after. its initial public offering on Euronext Amsterdam in September.

This is a developing story and will be updated shortly.