Pershing Square Tontine Holdings, a special purpose acquisition company, confirmed today that it is in talks with Vivendi. Pershing Square is discussing acquiring 10% of outstanding shares of Universal Music Group (UMG) for approximately $4 billion.
The plan is after Vivendi completes its listing of UMG on Euronext Amsterdam, Pershing Square would distribute the acquired UMG shares to shareholders.
“Universal Music Group is one of the greatest businesses in the world. said . 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.”
Bill Ackman, CEO of PSTH
UMG has the following strategic attributes and competitive advantages, according to the company:
– Number one industry market share in a stable competitive environment
– Iconic world‐class management team
– Massive and growing total addressable market. Everyone loves music!
– Consumer adoption of streaming will generate many years of high growth
– Irreplaceable owned IP and must‐have content Predictable, recurring revenue streams that require minimal capital despite high growth
– Significant fixed‐cost expense base allowing for long‐term margin expansion
– Minimal financial leverage (<1x Net Debt / EBITDA)
– UMG will be the only uncontrolled, pure‐play major music content company
– UMG will have an independent, high quality board of directors
