The billionaire William Ackman has lastly discovered his match.
Mr. Ackman’s particular goal acquisition firm is nearing a deal to take a 10 p.c stake within the Universal Music Group that will worth the corporate behind Taylor Swift, Lady Gaga and Kendrick Lamar at about $40 billion, two individuals briefed on the scenario mentioned.
The deal could possibly be introduced within the subsequent few weeks, although it is not ultimate and will nonetheless collapse, mentioned the individuals, who requested anonymity as a result of the talks are confidential.
Special goal acquisition corporations, extra generally generally known as SPACs, use capital from the general public market to put money into a personal firm, taking it public within the course of. Mr. Ackman’s SPAC, Pershing Square Tontine Holdings, has been on the prowl for a goal since elevating $four billion by an preliminary public inventory providing in July. While it was considered one of tons of of SPACs began final 12 months, its massive dimension made guessing which firm it might lastly make a deal with a well-liked recreation throughout Wall Street. A broader pullback in SPACs amid heightened regulatory scrutiny added to the curiosity.
“We’ve been working on a transaction since early November,” Mr. Ackman mentioned at a Wall Street Journal convention final month. “We’re either going to get a transaction done in the next relative short term — weeks — or we’ll be onto the next one.” He mentioned the deal was with an iconic personal firm and it might be complicated.
The Universal Music Group is backed by the French media large Vivendi, which has mentioned it plans to take the music enterprise public by the tip of this 12 months. Other buyers embrace the Chinese web firm Tencent, which introduced in January that it had elevated its stake in Universal to 20 p.c in a deal that valued the corporate at 30 billion euros ($24.four billion).
The dimension of a SPAC is solely loosely associated to that of its goal. Additional funding organized alongside a merger permits SPACs to tackle larger targets.
Singapore’s Grab, which provides journey hailing, grocery supply and different providers, introduced a SPAC deal in April that valued it at $39.6 billion, making it the most important SPAC transaction to date.
The Wall Street Journal reported the deal talks earlier.