Bill Ackman drops SPAC deal with Universal Music.

The billionaire investor Bill Ackman said Monday he had pulled back from a plan to use his jumbo-sized SPAC to purchase a stake in Universal Music Group, the world’s largest record label, after the Securities and Exchange Commission raised concerns about the complex transaction.

Under the proposed deal, Mr. Ackman’s special purpose acquisition company, or SPAC, would have purchased a 10 percent stake in Universal Music, the label behind Taylor Swift, Lil Wayne and Lady Gaga, valuing the company at more than $40 billion.

But the deal would have been complicated, and the S.E.C. was concerned whether it qualified as a SPAC deal at all. These blank-check companies, which use capital from the public market to invest in a private company, taking it public in the process, have drawn a lot of attention from investors over the past year — and increasing regulatory scrutiny.

In a letter to investors, Mr. Ackman said the team at his investment company, Pershing Capital, had failed to change the agency’s mind about the multilayered deal. Investors in the SPAC, known as Pershing Capital Tontine Holdings, seemed wary, too: Its shares had lost nearly a fifth of their value since the deal was announced.

Article source: https://www.nytimes.com/2021/07/19/business/bill-ackman-universal-music.html