Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Billionaire investor Bill Ackman’s blank check company is closing in on a deal to take Universal Music Group public in the largest special purpose acquisition company deal ever, a source told CNBC on Thursday.
The SPAC merger would be the largest ever, according to Dealogic, valuing Universal Music at roughly $40 billion, the source said. The deal would knock Southeast Asia’s ride-hailing giant Grab’s SPAC merger with Altimeter Growth Corp. out of first place, a deal that values Grab at $39.6 billion.
Pershing Square Tontine Holding (PSTH) shares fell more than 8% in extended trading after closing Thursday at $25.05. The SPAC IPO was offered at $20 a share and it started trading in September 2020.
French media company Vivendi is the majority owner of Universal Music. Chinese tech company Tencent is a minority stakeholder.
Blank check companies are usually formed to raise funds through an IPO to finance a merger or acquisition, typically within two years.
The news came as the SPAC market hit a roadblock on the regulatory front as the Securities and Exchange Commission proposed an accounting rule change that would classify SPAC warrants as liabilities instead of equity instruments. SPAC issuance has slowed down drastically after a record first quarter.
A total of 151 SPAC initial public offerings have already been completed in 2021, raising $47.6 billion, according to SPAC Research. There are 289 deals actively looking for targets, according to SPAC Research.
— with reporting from CNBC’s Leslie Picker and Yun Li.
