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Pershing Square to acquire Universal Music stake after SPAC deal blocked

The SEC raised concerns about the structure of the SPAC deal and if it qualified under NYSE rules.

Pershing Square Holdings -
UMG will become a public company when it is lists on Euronext Amsterdam in September.

Pershing Square Holdings Ltd (LON:PSH) Is to acquire a 10% stake in Universal Music Group (UMG) from Vivendi after US authorities blocked attempts to use a SPAC for the deal.

Pershing Square Tontine Holdings (PSTH), a special purpose acquisition company or SPAC, was originally supposed to acquire the stake.

In a letter today, Pershing Square boss Bill Ackman said that US financial regulator the SEC had raised concerns about the structure of the SPAC deal and if it qualified under NYSE rules.

After talks with the SEC, it was decided to switch the sale of the Universal Music stake to Pershing Square, which is listed in London, said the hedge fund billionaire.

“While management and the board clearly understood that the intricacies of our transaction structure could affect its attractiveness in the short term, we believed that substantial shareholder value would have emerged over the intermediate to long term from the sum of the parts that were created in the transaction, namely: (1) UMG, (2) PSTH RemainCo, and (3) warrants on Pershing Square SPARC Holdings, Ltd," said the letter.

“Furthermore, we expected that the transaction’s structural issues would largely be resolved by the end of this year.

“While PSTH shareholders will not receive UMG stock, UMG will become a public company when it is listed on Euronext Amsterdam in September.

“Pershing Square will be fulfilling PSTH’s commitment to Vivendi. Pershing Square intends to be a long-term UMG shareholder, and will endeavor to work with UMG management to help create value for all stakeholders,” said the letter.

Ackman added that PSTH would be looking for a new transaction.

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Price: 2585 GBX

Market Cap: £5.49 billion

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