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French media conglomerate Vivendi said on Friday that it is in talks to sell a 10 percent stake in Universal Music Group to hedge fund billionaire Bill Ackman’s Pershing Square Tontine Holdings in a deal that would value the music major at 35.0 billion euros ($42.4 billion).
Vivendi recently said it was looking to sell the 10 percent stake in the label home of the likes of Taylor Swift and Lady Gaga to a U.S. investor. The deal under consideration now would give Ackman’s financial vehicle a 10 percent stake in a newly public UMG.
Vivendi, which has so far been planning an initial public offering of the music firm in Amsterdam by late September, previously sold a 20 percent stake in it 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
Pershing is one of a slew of so-called SPACs, or Special Purpose Acquisition Companies, also known as “blank check” companies that take over privately held firms and 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.
The two parties “have entered into discussions for Vivendi to sell 10 percent of the Universal Music Group share capital to PSTH, prior to the distribution of 60 percent of the UMG shares and its listing,” Vivendi said Friday. “This transaction would be based on an enterprise value of €35 billion for 100 percent of the UMG…share capital,” subject to the authorization of the plan to take UMG public by Vivendi shareholders at a shareholder meeting June 22.
The transaction would be the largest SPAC deal on record, according to Dealogic data, the Wall Street Journal reported.
Vivendi, led by CEO Arnaud de Puyfontaine, also 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.”
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