Last month the music industry learned that the company that was supposed to buy 10% of Universal Music Group had pulled out.
That firm, Pershing Square Tontine Holdings (PSTH), run by billionaire Bill Ackman, is a US-based special purpose vehicle (SPAC).
Instead, we were told that another Pershing Square firm – Pershing Square Holdings (PSH), also run by Ackman – would step in to buy the shares.
However, PSH, which trades on the London Stock Exchange, made no commitment to buy the full 10% stake originally intended for PSTH.
Instead, UMG’s majority owner Vivendi confirmed that PSH would buy between 5 and 10% of the music company. And that the equity difference between the originally agreed 10% and the new 5% -10% will be sold to a new buyer.
Still keeping up? Because, let’s be honest, there are better dramas on other channels. For example: Have you seen paint dry?
Anyway, here’s the latest.
Pershing Square Holdings (that’s PSH, not PSTH) and Affiliates today (August 10) confirmed that they have acquired 7.1% of Universal Music Group.
This 7.1% acquisition will cost PSH $ 2.8 billion (USD) based on UMG’s previously agreed corporate valuation of 35 billion euros (EUR).
And in yet another jaw-dropping twist on this most compelling saga, Bill Ackman also secured the option to purchase an additional 2.9% in UMG (i.e. the amount required to increase his acquisition from 7.9% to 10%) .
If Ackman buys that additional 2.9%, Vivendi says, he will do so “through funds he manages or in which he holds the majority of the beneficial interests based on the same valuation”.
Ackman’s deadline for this potential 2.9% additional purchase is September 9, 2021.
The really interesting thing about it: If Bill Ackman goes on and buys the remaining 2.9% of the originally agreed 10% … cool. If he does not, Vivendi has exactly 11 days to move the 2.9% to another, completely new shareholder before UMG is listed on the Amsterdam Stock Exchange on September 21.
Still with us? Great, here’s your price: a quote from Vivendi, edited with today’s news on how things are going well.
“Vivendi is very satisfied with the arrival of Mr. Ackman, a major American investor, at UMG, which once again proves the worldwide success and attractiveness of the music company.”
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