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Vivendi Sells 7.1% of UMG To Bill Ackman’s Pershing Square Holdings

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(CelebrityAccess) — Vivendi, the French media conglomerate behind Universal Music Group announced the completion of the sale of 7.1% of UMG’s share capital to private equity magnate William Ackman’s Pershing Square Holdings and affiliates.

According to Vivendi, the stake in UMG was sold for USD 2.8 billion based, which is based on the estimated €35 billion enterprise value of Universal Music Group.

Under the terms of the deal, Ackman has the right to acquire up to an additional 2.9% of UMG’s share capital through funds which he manages or in which he holds the majority of economic interest, prior to September 9th.

The deal, which was originally to be conducted through a Special Purpose Acquisition Company, nearly unraveled in July after coming under regulatory scrutiny from the Securities & Exchange Commission.

The use of SPACs, or so-called ‘blank check companies’ are a form of reverse merger that has exploded in popularity in recent, fueled in large part by the loose monetary policy of central banks and raising more than $80 billion in 2020 alone.

SPACs allow investors to acquire private firms and take them public without the usual regulatory vetting process of a formal IPO. However, while SPACs are often quite profitable for their initial sponsors, academic analysis suggests that subsequent retail investors typically see very little, if any, return on investment.

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