Bill Ackman’s Pershing Square buys 7.1% of Universal Music Group

REUTERS/Mike Blake/Alamy
Bill Ackman, CEO of Pershing Square Capital, speaks at the Wall Street Journal Digital Conference in Laguna Beach, California, U.S., October 17, 2017

Last month, the music industry learned that the company which 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 acquisition company (SPAC).

Instead, we were told, another Pershing Square firm – Pershing Square Holdings (PSH), also run by Ackman – would be stepping in to buy the stake.

However, PSH, which trades on the London Stock Exchange, didn’t commit to buying the full 10% stake originally intended for PSTH.

Instead, UMG’s majority-owner, Vivendi, confirmed that PSH would be buying between 5% and 10% of the music company. And that the equity difference between the originally agreed 10% stake and the new 5%-10% stake would be sold to a new purchaser.

Still keeping up? Because, we’ll be frank, there are better dramas out there on other networks. For instance: have you SEEN paint dry?

Anyway, here’s the latest.

Pershing Square Holdings (that’s PSH, not PSTH) and “affiliates” have 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 the previously agreed enterprise valuation of UMG at €35 billion (EUR).

And in yet another stunning twist to this most gripping of sagas, Bill Ackman has also secured the option to buy an additional 2.9% of UMG (i.e. the amount required to take his acquisition from 7.9% up to 10%).

If Ackman does buy this extra 2.9%, says Vivendi, he will do so “through funds which he manages or in which he holds the majority of economic interest, based on the same valuation”.

Ackman’s deadline for that potential 2.9% extra purchase: September 9, 2021.


The actually-quite-interesting bit of all of this: If Bill Ackman goes ahead and buys the remaining 2.9% of the originally agreed 10%… cool. If he doesn’t, Vivendi will have precisely 11 days to shift the 2.9% to a different, all-new stakeholder before UMG lists on the Amsterdam stock exchange on September 21.

Still with us? Great, here’s your prize: a quote from Vivendi, issued with today’s news, on how everything’s hunky dory.

“Vivendi is very satisfied with the arrival at UMG of Mr. Ackman, a major American investor, providing once again evidence of the music company’s global success and attractiveness.”

MBW will be revealing the full extent of our own global success and attractiveness on the usual OnlyFans account, at the usual time.Music Business Worldwide