SPAC U-Turn Mars Ackman’s Hedge Fund Pivot: Analysis

Bill Ackman

 It was poised to be William Ackman’s brilliant pivot from activist hedge fund manager to prominent dealmaker, Reuters reports in this analysis of the billionaire’s terminated SPAC deal with Universal Music. It ended up souring his rebranding.

Ackman last year launched $4 billion Pershing Square Tontine Holdings, the largest blank-check acquisition firm ever raised. With backing from his investors and available bank debt, he amassed enough firepower to take public a company worth tens of billions of dollars.

Last month, however, Ackman unveiled plans to buy a 10% stake in Universal Music Group, which its owner Vivendi was already planning to spin off into a public company.

Shareholders of Pershing Square Tontine Holdings would receive Universal shares once the music label’s stock market flotation was completed and would not get a vote on it. Tontine would carry on in search of another deal, with $1.5 billion in capital left to deploy. Tontine investors would also receive warrants in a new blank-check company launched by Ackman that would pursue another, yet-to-be-determined acquisition.

It all ended early Sunday morning with Ackman’s letter to shareholderrs saying the SPAC deal was off. SEC concerns were cited as a primary reason. Investor confusion over the compledxity of the deal structure was another. Read more.

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