Shares of Pershing Square Tontine Holdings (NYSE: PSTH) have tanked today, down by 11% as of 11:30 a.m. EDT, after the special-purpose acquisition company (SPAC) confirmed that it is in negotiations to acquire 10% of Universal Music Group (UMG) for $4 billion, valuing UMG at $40 billion. The Wall Street Journal reported yesterday that the SPAC was nearing a deal with UMG, the largest record label in the world.
UMG is currently owned by Vivendi, which already sold a 20% stake in UMB to Chinese tech giant Tencent . Vivendi is preparing to go public and previously acknowledged that it was contemplating selling another 10% to an unnamed "American investor." It now appears that Pershing Square Tontine, the SPAC run by activist value investor Bill Ackman, is that investor.
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Why Pershing Square Tontine Holdings Stock Tanked on Friday