Bill Ackman renounces to use a SPAC to acquire 10% of Universal Music Group

By Emmanuel Legrand

Billionaire investor Bill Ackman's plans to acquire 10% of Universal Music Group from parent Vivendi through a special purpose acquisition company (SPAC) had to change following reservations expressed by the USA's Securities and Exchange Commission.

  Ackman's Pershing Square Tontine Holdings (PSTH) issued a letter to shareholders informing them that the board of directors "unanimously determined not to proceed with the Universal Music Group transaction.

  Wrote Ackman: "Our decision to seek an alternative initial business combination (“IBC”) was driven by issues raised by the SEC with several elements of the proposed transaction – in particular, whether the structure of our IBC qualified under the NYSE rules."

A long-term UMG shareholders

  He added: "None of us anticipated this outcome. Yet, despite the inability of PSTH to consummate the UMG transaction, our counterparty was not left at the altar. 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."

  Vivendi confirmed that Ackman's investment funds will acquire between 5 and 10% of UMG's shares, and if the figure is below 10%, the shortfall would be sold "to other investors" if such were the case.