CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78.1% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Bill Ackman restructures Universal Music deal due to regulator concerns

By Jenny McCall

07:41, 19 July 2021

Universal Music

Bill Ackmans’s Pershing Square has decided to restructure its deal to purchase Universal Music Group (UMG), after US regulators raised concerns.

In an announcement today, Ackman rejigged the deal, which would originally have cost $4bn and a 10% share in UMG. 

Pershing agreed last month to buy the stake in UMG, which is the company behind well-known artists such as Taylor Swift, Ariana Grande and Alicia Keys. Pershing had originally agreed to buy the stake from Universal’s owner, Vivendi and they planned to use a special purpose acquisition company called Pershing Square Tontine Holdings (also known as Spac).

Restructure of deal 

But in a statement Ackman’s company said they had “unanimously determined not to proceed” with the transaction as the Securities and Exchange Commission had found problems with the deal.

“Our decision to seek an alternative initial business combination (IBC) was driven by issues raised by the SEC with several elements of the proposed transaction – in particular, whether the structure of our IBC qualified under the NYSE rules,” the statement read.

USD/JPY

151.38 Price
+0.030% 1D Chg, %
Long position overnight fee 0.0113%
Short position overnight fee -0.0195%
Overnight fee time 21:00 (UTC)
Spread 0.010

EUR/USD

1.08 Price
-0.390% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0002%
Overnight fee time 21:00 (UTC)
Spread 0.00006

GBP/USD

1.26 Price
-0.190% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 21:00 (UTC)
Spread 0.00013

AUD/USD_zero

0.65 Price
-0.680% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 21:00 (UTC)
Spread 0.00006

Pershing announced that since the transaction was announced its share price had fallen by 18%. The company said that while it believed shareholders recognized UMG’s “extraordinary attributes” and “growth characteristics,” it had underestimated the reaction that some shareholders would to the transactions complex structure.

“We also underestimated the transaction’s potential impact on investors who are unable to hold foreign securities, who margin their shares, or who own call options on our stock,” the statement read.

What is your sentiment on PSH?

51.435
Bullish
or
Bearish
Vote to see Traders sentiment!

Not giving up 

However, Perishing has not given up yet. In the statement, the company said it had not left the deal table and planned to fulfil its commitment to Vivendi.

“Yet, despite the inability of PSTH to consummate the UMG transaction, our counterparty was not left at the altar. Pershing Square will be fulfilling PSTH’s commitment to Vivendi. Pershing Square intends to be a long-term UMG shareholder, and will endeavour to work with UMG management to help create value for all stakeholders,” the statement read.

Trade Pershing Square Holdings, Ltd. - PSH CFD

1m
5m
15m
30m
1H
4H
1D
1W

Read more: Pershing Square Tontine Holdings IPO: are you willing to write a blank check to Bill Ackman?

Related topics

Rate this article

Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 580.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading