Vivendi and Pershing Square Tontine Holdings (PSTH), represented by CEO Bill Ackman, have entered into discussions for the sale of 10% of the Universal Music Group share capital.
The hedge fund billionaire would acquire 10% of the major for around €3.5 billion prior to the distribution of 60% of the UMG shares and its listing. It follows the acquisition of 10% by a consortium led by Tencent.
Pershing Square Tontine Holdings, a special purpose acquisition company (SPAC), broke records with its $4bn listing last year.
According to the FT, Ackman beat private equity firm Hellman & Friedman to the deal. It had offered to buy a 10% stake in Universal at a €30bn valuation. The move by Ackman was described as a proxy move to value UMG ahead of the IPO.
This PSTH transaction would be based on an enterprise value of €35 billion for UMG, subject to the authorisation given by Vivendi shareholders at the June 22 shareholders’ meeting to distribute 60% of the UMG share capital and list the company.
In addition, the Pershing Square funds and their affiliates have indicated that they may acquire additional economic exposure to UMG by acquiring Vivendi securities.
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