Pershing Square Tontine Holdings, a SPAC run by billionaire investor Bill Ackman, today in a 2 a.m. letter to shareholders said it would not proceed with the $4 billion deal to acquire a 10 percent stake in Vivendi’s Universal Music Group.
Ackman said the decision was based on concerns raised by the SEC over whether Pershing’s post-deal IBC structure would qualify under NYSE rules. The SPAC’s legal counsel tried unsuccessully to dissuade the SEC from its position, he added.
The decision to quit the deal was reportedly made Sunday by the SPAC’s board. Ackman’s new plan is to buy the Universal Music stake directly with his hedge fund.
The SPAC deal had raised eyebrows among Pershing stockholders and observers alike for its unique structure.
“In light of our recent experience, our next business combination will be structured as a conventional SPAC merger,” Ackman said in the letter, noting that it has an additional 18 months to complete a new deal.
Pershing Square’s share price has plunged 18 percent since the deal was announced last month.
“We underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure,” Ackman wrote. Read more.