- Bill Ackman’s PSTH will not buy 10% of Universal Music for about $ 4 billion after the SEC pushback.
- The billionaire investor’s Pershing Square funds will instead buy a stake in Universal.
- PSTH is now considering pursuing a conventional PSPC transaction.
- See more stories on the Insider business page.
Bill Ackman gave up his plans to buy 10% of Universal Music for $ 4 billion using its ad hoc acquisition company (
) after federal regulators poured cold water on the proposed deal, the billionaire investor told shareholders of Pershing Square Tontine Holdings (PSTH) in a monday letter.
PSTH will transfer its share purchase agreement to Ackman’s Pershing Square company and its subsidiaries, the investor wrote. In this way, he always becomes a major shareholder and the owner of Universal Vivendi will not be “left at the altar”, he added.
The PSPC board of directors unanimously decided on Sunday to abandon the Universal deal after speaking to the SEC and realizing the agency would likely reject it. PSTH directors will now focus on entering into a conventional PSPC deal and have 18 months to enter into one, unless shareholders vote for an extension.
Ackman was caught off guard by the reaction of some PSTH shareholders to the complexity and structure of the original deal, he noted in his letter. The investor also underestimated its potential impact on investors who cannot own foreign securities, marginalize their shares or have call options on PSTH shares, he added.
Before the SEC shattered its hopes, Ackman envisioned PSTH shareholders receiving Universal shares after Vivendi made the division public in September, continuing to hold PSTH shares as SPAC sniffs a merger without the usual time constraints. and securing the rights to buy shares in a new investment vehicle called SPARC once it accepts its own transaction.
The withdrawal of PSTH from the Universal deal will disappoint some Ackman fans, who have spent seven months speculating on the identity of its target of acquisition. Others who weren’t excited about the Universal deal might welcome the SPAC by hitting the reset button while searching for it.