Pershing Square Tontine Holdings (PSTH), a US-based special purpose vehicle (SPAC), officially purchases 10% of Universal Music Group.
PSTH today (June 20) confirmed that it has entered into a definitive agreement with UMG’s majority owner Vivendi to acquire 10% of UMG’s outstanding common stock for approximately $ 4 billion.
Later that year, after Vivendi finalized UMG’s previously announced listing on Euronext Amsterdam, shares representing 10% of the music company will be distributed to PSTH shareholders.
Vivendi has already announced that the listing of UMG in Amsterdam – with which 60% of the company will go public – will be completed “at the latest” on September 27th.
After listing in Amsterdam and distributing the PSTH shares, UMG will be 10% by Vivendi, 10% by PSTH, 60% as traded on Amsterdam Euronext and 20% held by a consortium led by Tencent Holdings.
Today’s news reflects the conclusion of talks between PSTH and Vivendi on the deal, as originally announced on June 4th.
PSTH today reaffirmed to its investors that Universal has “strategic attributes and competitive advantages,” including “predictable, recurring revenue streams that require minimal capital despite high growth.”
It added that UMG offers a “substantial fixed cost base that enables long-term margin expansion”.
PSTH also announced to its shareholders: “In the course of our negotiations with Vivendi it became clear that various tax, legal and other strategic considerations were preventing Vivendi from entering into a ‘traditional’ de SPAC merger transaction and selling more than 10%. from UMG.
“Despite the added complexity, time, legal costs, and other costs that these restrictions brought with them, we believed that the opportunity to acquire such an extraordinary company was the best option for our shareholders.
“Basically in favor of this decision was the fact that the UMG transaction alone offers our shareholders the same advantages and protection options that they would have received in a traditionally structured de-SPAC merger and share distribution.”
After the UMG payout, PSTH shareholders will continue to hold shares in PSTH, which will continue to exist, with approximately $ 1.5 billion in cash and access to an additional $ 1.4 billion in cash through forward purchase agreements.Music business worldwide