Ackman’s UMG Deal Includes Grandpa’s Hit
• Pershing Square Tontine Holdings, Ltd. (PSTH), a special purpose acquisition company (SPAC), run by hedge-fund billionaire Bill Ackman formally confirmed that it is indeed in discussions with Vivendi S.E. to acquire 10% of the outstanding Ordinary Shares of Universal Music Group B.V. (UMG) for approximately $4 billion, representing an enterprise value of $40 billion for UMG. Later this year, after Vivendi completes its previously announced listing of UMG on Euronext Amsterdam, PSTH plans to distribute the acquired UMG shares to its shareholders.
“Universal Music Group is one of the greatest businesses in the world,” said Ackman, CEO of PSTH. “Led by Sir Lucian Grainge, it has one of the most outstanding management teams that I have ever encountered. Importantly, UMG meets all of our acquisition criteria and investment principles as it is the world’s leading music company, with a royalty on the growing global demand for music. We are delighted to work with Vivendi on this iconic transaction, and look forward to its consummation.” The proposed transaction is subject to the completion of mutually satisfactory transaction documentation, but is not subject to additional due diligence.
Interestingly, the Wall Street Journal reports that the potential deal would include a song written by Ackman’s grandfather, Herman Ackman back in 1926 that he sold for $150 on Tin Pan Alley, the old-time New York City hub of publishers who dominated pop music. “Put Your Arms Where They Belong (For They Belong to Me)” turned out to be a hit, with more than 750,000 copies sold. While the companies were going back and forth on the mechanics of the potential SPAC deal, Universal executives tracked down two 78s of the song and the sheet music, then mounted and framed them as a gift to Mr. Ackman.
According to the WSJ, Ackman started discussing a potential hook-up with Universal and Vivendi last November after he was introduced to a member of Vivendi’s board. Last week, after months of Zoom meetings, Ackman flew to Paris, where he met face-to-face with Vincent Bolloré, the billionaire chairman of the supervisory board, and Vivendi CEO Arnaud de Puyfontaine. Last Wednesday night, Ackman had dinner with Bolloré on the roof of Vivendi’s offices overlooking the Arc de Triomphe, and by Thursday, the WSJ says Ackman was back in New York and they agreed on a deal via Zoom.
Universal parent Vivendi SE said on Friday that the transaction is subject to a shareholder vote later this month to distribute 60% of Universal’s shares and list the company in the Netherlands.
