American billionaire investor William Ackman-backed SPAC (Special Purpose Acquisition Company), Pershing Square Tontine Holdings, had been in an advanced stage merger talk with the world’s largest music company Universal Music Group in a deal that could value the French media giant Vivendi-owned Universal Music at roughly $40 billion, sources familiar with the subject-matter had unveiled late on Thursday on condition of anonymity given the scale of sensitive nature of the subject-matter.
If successful, a $40 billion SPAC mega-merger between Ackman-backed blank-check firm and Universal Music Group, would mark up the world’s largest ever SPAC-backed deal, however, ride sharing giant Grab Holdings had been taken public back in April following a roughly $40 billion merger with an SPAC or blank check firm.
A Wall Street Journal report had been the first to unfold the proceedings. Nonetheless, following reveal of the media topline, shares’ prices of Pershing Square slipped as much as 12 per cent in post-market trading.
SPACs or Special Purpose Acquistion Companies are shell entities that could be capitalized on to taking a company public following a merger or acquisition, while SPACs or blank check firms were allowed to raise funds through IPOs or private fundraising campaign to finance their planned mergers or acquisitions without telling the investors about the companies they have been pursuing.
Ackman-backed SPAC closes in $40bn mega-merger with Universal Music Group
Aside from that, latest move from Ackman-backed blank check firm to take Universal Music Group public at a valuation of $40 billion, came against the backdrop of a baleful landscape in US SPAC market, as US SEC was quoted saying later last week that it was going to make core policy changes in order to prevent a gust of SPAC-based listings, of which a lion’s share of companies had yet to report a revenue.
Nonetheless, Ackman was quoted saying later last month in a post-earnings conference call that his group was working to complete a transaction, though the founder and Chief of Pershing Square Capital Management, Ackman, did not disclose the company name which his SPAC was pursuing.