Bill Ackman sees Universal Music SPAC deal closing later this month

Bill Ackman, Founder and CEO of Pershing Square Capital Management.

Adam Jeffery | CNBC

Billionaire investor Bill Ackman said Friday he expects to close his SPAC deal to purchase 10% of Universal Music Group for approximately $ 4 billion by the end of this month.

Ackman’s blank check firm Pershing Square Tontine Holdings (PSTH) is likely to close the deal by June 22, said CNBC investor Scott Wapner. The French media company Vivendi, the majority owner of Universal Music with 80%, will hold its shareholders’ meeting on that day.

Ackman said he was excited about the deal and believes he will get a part of the # 3 player in the room at a discount.

The deal would put Universal Music at 35 billion euros (around 42.4 billion US dollars). It will not result in a merger and Universal Music will have a scheduled listing on Euronext Amsterdam in the third quarter of 2021.

The deal would leave $ 1.5 billion in residual funds in Ackmans SPAC, which would be converted into an initial SPARC or special purpose vehicle for another acquisition.

Unlike a traditional SPAC, where investors tie up capital without knowing the target company, Ackman informs SPARC investors of the potential takeover before they mortgage funds. In other words, investors can sign up if they like the deal and leave if they don’t.

Ackman’s hedge fund will own approximately 30% of SPARC, which will remain listed on the NYSE but will no longer be treated as SPAC under the listing rules of the exchange.

SPARC will have at least $ 6.6 billion in cash and up to about $ 10.6 billion for the next deal.

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