Bill Ackman drops SPAC deal with Universal Music.

The chief of Pershing Capital said the proposed transaction was drawing concerns from the Securities and Exchange Commission.,

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The billionaire investor Bill Ackman said Monday he had pulled back from a plan to use his jumbo-sized SPAC to purchase a stake in Universal Music Group, the world’s largest record label, after the Securities and Exchange Commission raised concerns about the complex transaction.

Under the proposed deal, Mr. Ackman’s special purpose acquisition company, or SPAC, would have purchased a 10 percent stake in Universal Music, the label behind Taylor Swift, Lil Wayne and Lady Gaga, valuing the company at more than $40 billion.

But the deal would have been complicated, and the S.E.C. was concerned whether it qualified as a SPAC deal at all. These blank-check companies, which use capital from the public market to invest in a private company, taking it public in the process, have drawn a lot of attention from investors over the past year — and increasing regulatory scrutiny.

In a letter to investors, Mr. Ackman said the team at his investment company, Pershing Capital, had failed to change the agency’s mind about the multilayered deal. Investors in the SPAC, known as Pershing Capital Tontine Holdings, seemed wary, too: Its shares had lost nearly a fifth of their value since the deal was announced.

We underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure,” Mr. Ackman wrote.

The deal called for the Pershing Square Tontine to invest $4 billion for a 10 percent stake in Universal Music, which was already being taken public by its parent, Vivendi. That would have left $1.5 billion in the investment vehicle, which would have been rolled over into a new publicly traded acquisition fund that would have looked to do another deal. Existing investors in Pershing Square Tontine would have received a financial instrument that gave them the right to buy into yet another deal vehicle, which would seek its own takeover target.

While Mr. Ackman’s SPAC is stepping back from the Universal Music deal, Mr. Ackman is not — his hedge fund will buy the stake directly instead.

Pershing Square Tontine now has 18 months to find and close a new deal, unless shareholders give it more time, and “our next business combination will be structured as a conventional SPAC merger,” Mr. Ackman said.

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