The French media conglomerate finalized a deal to offload a 10 percent stake in the music major to a blank check company of Bill Ackman’s hedge fund Pershing Square.
Vivendi previously sold a 20 percent stake in UMG to a consortium led by Chinese online giant Tencent. It has said it plans to distribute 60 percent of UMG, while retaining the remaining 10 percent for a minimum period of two years.
UMG is the world’s biggest music label and follows Warner Music to the public markets. Warner Music IPOd in 2020, with a $15 billion valuation. it is currently valued at just under $18 billion. The rise of streaming services like Spotify and social platforms like TikTok have significantly bolstered the music business in recent years.
Blank check companies, or Special Purpose Acquisition Companies (SPACs), take over privately held firms and usually take them public in an alternative to a traditional IPO. Over the past year-plus, Wall Street has seen a big number of SPAC IPOs.
This deal would be different, however, with UMG still set to go public via an IPO in the third quarter of 2021. Instead, Pershing Square Tontine said it will have about $1.5 billion left over after the UMG deal is complete, which it will use to try and find another company to take public. The company will also create what it calls a “SPARC,” which will be given to shareholders, trade separately and which will also seek to merge with another private company.
The deal is subject to the authorization of the plan to take UMG public by Vivendi shareholders at a shareholder meeting on June 22. The transaction would be the largest SPAC deal on record, according to Dealogic data.
Vivendi, led by CEO Arnaud de Puyfontaine, has previously said: “In addition, the Pershing Square funds and their affiliates have indicated that they may acquire additional economic exposure to UMG by acquiring Vivendi securities and/or by acquiring UMG securities following the distribution of UMG shares by Vivendi.”
Alex Weprin contributed to this report.
June 21, 2021 at 01:40AM
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Vivendi’s Universal Music to Sell 10 Percent Stake to Bill Ackman SPAC, Valuing Label at $40B - Hollywood Reporter
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