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It was confirmed on Sunday that a blank check company backed by hedge fund billionaire Bill Ackman will acquire Universal Music, the Taylor Swift brand, for $4 billion. Group) 10% of the shares.
As part of the transaction, Ackman’s investment tool Pershing Square Tottine Holdings will distribute shares to its shareholders after the French owner of UMG, Vivendi, completes its planned listing on Euronext. This is part of the transaction. Amsterdam.
After the transaction is completed, PSTH will continue to exist, receive up to 2.9 billion U.S. dollars in cash, and “plan to immediately merge with the operating business.” PSTH stated that the enterprise value of the new transaction is 35 billion euros.
Confirm the transaction, Report Earlier this month, the British “Financial Times” reported that as profits in the music business grew, Vivendi was trying to squeeze cash from the lucrative sector.
The French media group controlled by billionaire Vincent Bolloré previously sold a 20% stake in Global to China’s Tencent.
In an email sent to employees on Sunday, UMG CEO Lucian Grainge praised the deal with Ackerman as part of a “new chapter” for the brand.
“As you can see from PSTH’s announcement, this investment represents a powerful testament to UMG, our strategy, our employees, our legendary catalog, and our amazing list of artists and songwriters,” he wrote .
“In fact, in addition to Vivendi, we now have two determined investors-the consortium led by Tencent and PSTH-are powerful support imaginable in the investment and technology circles.”
PSTH defeated the competition of private equity firm Hellman & Friedman, which offered to acquire a 10% stake in Universal at a valuation of 30 billion euros.
Due to increased royalties on streaming services such as Spotify, music companies have gained value in recent years.
PSTH’s statement pointed out that UMG’s operating profit has grown by more than 20% annually since 2017, and analysts expect its profit in 2021 to exceed 1.5 billion euros, with an operating profit margin of 19%.
According to estimates by Midia Research, Universal Pictures has artists including Kanye West and Lady Gaga, which account for nearly 30% of the market.
Spacs is an investment vehicle that raises funds through public listings to find private companies to go public, although the recent increase in regulatory review has slowed the number of listings.
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