Pershing Square Tontine Holdings Ltd (NYSE:PSTH), confirmed today that the special purpose acquisition vehicle assembled by billionaire investor Bill Ackman is currently in negotiations with Universal Music Group. The arrangement would see the SPAC buy 10% of the company for a total figure of $4.0 billion.
The deal will place UMG at a value of around $42.4 billion, making it the largest target for a special purpose acquisition company (SPAC), trumping Southeast Asian ride-hailing and food delivery firm Grab Holding’s SPAC deal wherein it acquired Altimeter Growth Corp.
According to PSTH, the deal will not result in a merger and will still allow UMG to go ahead with their planned listing on the Euronext Amsterdam by the third quarter of 2021. French media company Vivendi still remains the majority shareholder, while Chinese tech company Tencent remains as a minority stakeholder.
Notably, the arrangement would see PSTH shareholders receive three separately traded securities. First, they would receive their pro-rata shares of UMG ordinary shares, currently valued at $14.75 per share. Second, they would receive a pro-rata share of PSTH after the distribution, currently valued at $5.25 per share. Finally, they would receive one five year right per share of Pershing Square SPARC Holdings, which is to trade on the NYSE.
Pershing Square Tontine Holdings Ltd last traded at $25.05 on the NYSE.
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