Pershing Square Holdings (LSE:PSH) Ltd (LSE:PSH) has acquired a 7.1% stake in Universal Music Group (UMG), one of the big three record labels, from Vivendi for US$2.8bn.
The shares changed hands at US$21.78 per share, which is equivalent to about €18.58.
Pershing Square and its affiliates have the right to acquire up to an additional 2.9% of UMG’s share capital at the same price by 9 September. Pershing Square, the investment firm managed by billionaire investor Bill Ackman, said it intends to exercise the option to increase its stake to 10%.
The move follows Ackman’s decision not to use a SPAC – special purpose acquisition company – to acquire a 10% stake in UMG after the US’s Securities and Exchange Commission (SEC) expressed misgivings about the complicated nature of the deal.
Key executives at DaBaby’s label, as well as top brass at Universal Music Group, were also said to be “extremely upset” by the rapper’s remarks. Complicating matters further, the company is in the process of an IPO that is expected to launch next month. https://t.co/dCovXzmAVt
— Variety (@Variety) August 5, 2021
When he first signalled his intention to buy a chunk of UMG, Ackman made his love of music clear.
“You need food and water to live, but music comes next,” he told reporters.
What’s more, he observed, you can’t license intellectual property from food and water.
Ackman said he would have preferred to have taken a bigger stake, initially asking Vivendi for a 17.5% stake but the French company declined the offer.