The non-profit company backed by hedge fund billionaire Bill Ackman is buying a 10% stake in Universal Music Group, named Taylor Swift, $ 4bn, confirmed Sunday.
As part of the sales, the first type of private company, Pershing Square Tontine Holdings, Ackman’s cash-in-transit company, will share the shares after Vivendi, the owner of UMG in France, completes the planned listing at Euronext Amsterdam.
PSTH will continue to exist after the sale and the opportunity to reach $ 2.9bn in funding, and “wants to do business with a fast-moving business”. PSTH said the new contract price was 35bn euros.
Evidence of cooperation, reports earlier this month with the Financial Times, comes as Vivendi is trying to squeeze money into its lucrative assets on a profitable rise in the music business.
The French media team, led by billionaire Vincent Bolloré, has already sold 20% of Universal to Tencent in China.
In an email sent to co-workers on Sunday, Lucian Grainge, head of UMG, praised the partnership with Ackman as part of the brand’s “new title”.
“As you can see from the announcement of PSTH, these funds represent a strong commitment to UMG, our ideas, our people, our well-known list and our excellent team of artists and songwriters,” he wrote.
“And since we have, in addition to Vivendi, two volunteer women – a Tencent-led partnership, as well as PSTH – are as strong a partnership as we can imagine from financial and professional groups.”
PSTH returned the competition from the independent trading company Hellman & Friedman, which offered to buy a 10% stake in Universal for € 30bn.
The music industry has made huge profits in recent years by raising royal revenue from entertainment platforms such as Spotify.
The PSTH statement also highlighted UMG’s profit growth of more than 20% per annum since 2017 and experts’ expectations of earning more than € 1.5bn in 2021, 19% on profit margins.
Universal, homeowner Kanye West and Lady Gaga, controls about 30% of the market, according to a comparison by Midia Research.
Spacs are commercial vehicles that earn money through the public domain in order to find private businesses so that they can be seen in public, although regulatory illumination has reduced the number of lists recently.
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