Vivendi To Sell 10% of Universal Music to Bill Ackman SPAC

Vivendi SE is in talks to sell a 10% stake in Universal Music Group to a blank-check firm backed by billionaire Bill Ackman in a deal that will turn the world’s biggest record company into a publicly held business.

Bloomberg reports the potential transaction would value UMG at 35 billion euros ($42.4 billion) including debt, above the 30 billion-euro valuation ascribed to the business 18 months ago when China’s Tencent Holdings Ltd. acquired a stake.

Bill Ackman

Ackman’s special purpose acquisition company, called Pershing Square Tontine Holdings Ltd., raised $4 billion in a July initial public offering -- a record-setting amount for a SPAC. Such firms go public and then find promising companies to merge with.

Vivendi still plans to go ahead with a spinoff of the music business that will lead to a separate listing in Amsterdam, according to a person familiar with the matter. That deal is due to be approved by Vivendi shareholders later this month.

UMG’s roster of artists includes Taylor Swift, Drake and Billie Eilish. The music industry has rebounded from a decade-long slump thanks to surging revenue from streaming services, and Vivendi has sought to unlock more value from UMG -- especially after suffering declines in its advertising and publishing operations.

Going public could give UMG more financial clout to compete with rivals Warner Music Group Corp. and Sony Music Entertainment. Vivendi had originally planned a 2023 IPO for UMG, but said earlier this year that it was now aiming for the business to go public by the end of 2021.