Hedge fund billionaire Bill Ackman is approaching a deal with Universal Music Group that will see his empty company earn a 10% share in the history of recording artists like Lady Gaga and Cyndi Lauper, people say.
The partnership with Pershing Square Tontine Holdings, which broke records with $ 4bn lists last year, will honor Universal nearly $ 40bn.
Shares in the company’s Ackman-listed stock on the New York Stock Exchange fell nearly 14% of its trading hours over hours, as traders did not like the company’s news.
Ackman, a special development company, is working with its advisers to finalize the terms of the agreement, which could take days or weeks to complete, people say.
Last month Vivendi said it was considering selling another 10% share in Universal Music to a US retailer. The French media team, led by billionaire Vincent Bolloré, has already sold 20% of Universal to Tencent in China.
The devastation comes as Vivendi seeks to extract money from Universal Music, its most valuable asset that has benefited from the revival of the music business. Universal, which has events including The Beatles, Drake and Taylor Swift, is the world’s largest record, controlling nearly 30% of the market, according to a Midia Research comparison.
Ackman also said last month he could announce a deal in the next few weeks. The retailer said he had been working on the project since early November, adding that he was “very busy” with a well-known business. Ackman at the time had many problems with the alliance.
The cost of the music industry has skyrocketed in recent years as advertising services such as Spotify revived the ailing business, sending billions of dollars in royalties to subscribe to Universal. In 2013 SoftBank offered to buy Universal Music for only € 6.5bn.
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