Ackman’s Spac buys 10% of Universal Music for $ 4 billion

An empty venture backed by fifth-billionaire Bill Ackman is set to buy a 10 percent stake in Taylor Swift’s Universal Music Group label for $ 4 billion, it confirmed on Sunday.

The first of its kind for a specially acquired acquisition company, Pershing Square Tontin Holdings, Ackman Investment Machine, will distribute the shares to its shareholders only after Vivendi, the French owner of UMG, has completed his stake in Euronext. scheduled list. Amsterdam

PSTH will continue to exist after the deal, until it has $ 2.9 billion in cash, “intending to pursue a business combination with the existing business immediately.” The PSTH said the new deal was worth 35 billion euros.

Confirmation of the transaction, reports Earlier this month, the Financial Times wrote that Vivendi was trying to withdraw cash from its for-profit unit amid rising profits in the music business.

The French media group controlled by billionaire Vincent Boley had previously sold 20% of Universal to Tencent in China.

In an email to his staff on Sunday, Lucian Grange, UMG’s chief executive, welcomed the deal with Akman as part of a “new chapter” for the label.

“As you can see from the PSTH statement, this contribution represents a strong confirmation of the amazing list of UMG, our strategy, our people, our legendary catalog, artists and composers,” he wrote.

“And the fact that we now have two dedicated investors in addition to Vivendi, a consortium led by Tencent, as well as PSTH, is as strong an endorsement as one can imagine from the investment and technology communities. »

PSTH won the competition from private equity firm Hellman & Friedman, which offered to buy a 10% stake in Universal for $ 30 billion.

Music companies have gained value in recent years due to rising fees for streaming services like Spotify.

The PSTH statement pointed to an increase in UMG’s operating profit of more than 20% per annum from 2017. Analysts expect more than € 1.5 billion in profit in 2021, which is 19% of operating profit.

According to Midia Research, Universal, which includes the operations of Kanye West և Lady Gaga, has a market share of almost 30%.

Spacs are investment vehicles that raise money through public listing to find private businesses to take over the public, although recent tightening of regulatory oversight has slowed listing.

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