Billionaire William Ackman has finally found his match.
Mr Ackman’s special purpose acquisition company is close to a deal to take a 10 percent stake in Universal Music Group, which would value the company behind Taylor Swift, Lady Gaga and Kendrick Lamar at around $40 billion, two people briefed on the situation said. .
The deal could be announced in the next few weeks, although it is not final and could still be broken, said the people, who requested anonymity because the talks are confidential.
Special purpose acquisition companies, commonly known as SPACs, use capital from the public market to invest in a private company, taking it public in the process. Mr Ackman’s SPAC, Pershing Square Tontin Holdings, has been pushing for Target since raising $4 billion through an initial public stock offering in July. While it was one of hundreds of SPACs launched last year, its sizable size made speculation about which company it would eventually deal with, a popular game in Wall Street. The widespread reduction in SPAC amid increased regulatory scrutiny added to the interest.
“We’ve been working on a transaction since early November,” Ackman said at the Wall Street Journal conference. last month. “We’re either going to be trading in the next relative short term — weeks — or we’ll be on the next one.” He said the deal was with a reputed private company and it would be complicated.
Universal Music Group is backed by French media giant Vivendi, which where is It plans to take the music business public by the end of this year. Other investors include Chinese Internet company Tencent, which was announced in January that it had increased its stake in Universal to 20 percent, which cost the company 30 billion euros ($36.4 billion).
The size of the SPAC is only related to the size of its target. The merger as well as the provision of additional funding allows SPAC to achieve larger goals.
Singapore-based Grab, which provides ride hailing, grocery delivery and other services, announced a SPAC deal in April that was valued at $39.6 billion, making it the largest SPAC transaction ever.
wall street journal First reported deal negotiations.