French media conglomerate Vivendi has finalized a deal to sell a 10% stake in Universal Music Group to a so-called “blank check” company created by Bill Ackman’s hedge fund Pershing Square, valuing the music major at 35 , 0 billion euros (40 billion dollars).
Vivendi had recently said it was in talks with the financial vehicle to sell it the stake in the label, home of Taylor Swift and Lady Gaga.
Vivendi has long envisioned an IPO of the music company in Amsterdam by the end of September, and that plan is still ongoing, with SPAC Pershing Square Tontine Holdings telling shareholders on Sunday that they would receive UMG shares more later this year after the IPO. . UMG will broadcast a 22-minute video about the company to shareholders at Pershing Square Tontine on Wednesday, June 23.
Vivendi previously sold a 20% stake in UMG to a consortium led by Chinese internet giant Tencent. He announced his intention to distribute 60 percent of UMG, while keeping the remaining 10 percent for a minimum period of two years.
UMG is the world’s largest music label and follows Warner Music in public markets. Warner Music IPOd in 2020, with a valuation of $ 15 billion. it is currently valued at just under $ 18 billion. The rise of streaming services like Spotify and social platforms like TikTok has significantly strengthened the music industry in recent years.
Blank Check Companies, or Special Purpose Acquisition Companies (SPACs), take over private companies and usually go public instead of a traditional IPO. Over the past year and more, Wall Street has seen a large number of PSPC IPOs.
This deal would be different, however, with UMG still set to go public via an IPO in Q3 2021. Instead, Pershing Square Tontine said it would have around $ 1.5 billion left after the deal. UMG concluded, which he will use to try to find another company to go public. The company will also create what it calls a “SPARC”, which will be handed over to shareholders, negotiate separately and which will also seek to merge with another private company.
The transaction is subject to the authorization of the proposed introduction of UMG by Vivendi shareholders at a general meeting on June 22. The operation would be the largest PSPC operation on record, according to data from Dealogic.
Vivendi, headed by CEO Arnaud de Puyfontaine, had previously declared: “In addition, the Pershing Square funds and their subsidiaries have indicated that they could acquire additional economic exposure to UMG by acquiring Vivendi securities and / or by acquiring securities. UMG following the distribution of UMG shares by Vivendi.
Alex Weprin contributed to this report.