American hedge fund director Bill Ackman’s Pershing Square is purchasing an extra 2.9% of Universal Music Group (UMG) from Vivendi for $1.149 billion, the French conglomerate said on Tuesday.
Vivendi said the exchange depended on an enterprise value of 35 billion euros ($41.40 billion) for 100% of UMG’s share capital.
The arrangement, to close Sept. 9, implies Pershing Square will possess 10% of UMG’s share capital after it purchased a 7.1% stake from Vivendi in August, the French company added.
The exchange comes ahead of the dissemination of 60% of UMG’s share capital to Vivendi’s investors and the listing of the company scheduled for September 21.
UMG, which addresses craftsmen like Justin Bieber and Taylor Swift, is profiting from a music industry bounce back, supported by roaring streaming incomes yet additionally a new surge in deals of vinyl records and Albums.
In January, Vivendi said a consortium driven by Chinese media group Tencent had purchased an extra 10% stake in UMG, pushing it’s holding up to 20%. Tencent has been expanding internationally with stakes in Spotify and Warner Music Group.
Other than UMG, Vivendi’s media resources include pay television firm Canal+, communications group Havas, video games firm Gameloft, video-sharing firm Dailymotion, in addition to other publishing and entertainment firms.
The French conglomerate has said it intends to utilize the returns from the UMG deals to pay off its debt obligation and to fund share buybacks and acquisitions.
Tycoon Ackman had initially intended to make the UMG investment through a special purpose acquisition vehicle (SPAC) yet is currently purchasing it through his Pershing fund after the initial arrangement encountered obstacles.
