Billionaire Bill Ackman’s Pershing Square Tontine Holdings Ltd. scrapped plans to buy 10% of Santa Monica-based Universal Music Group for about $3.95 billion.
But this isn’t the end of Ackman’s financial ties with Universal Music, the world’s largest music company owned by French conglomerate Vivendi.

Though viewed as a setback for the activist hedge fund investor, Ackman said he plans to still become a long-term investor in Universal Music — though not through a SPAC, or special purpose acquisition company.

“Management and the board believe that greater shareholder value can be created by working expeditiously to identify a new merger partner,” Ackman wrote in a July 19 shareholder letter about Tontine.

A Pershing Square spokesperson said Ackman wasn’t available to respond to questions about the hedge fund’s next move. Ackman’s Pershing Square Capital Management has about $14 billion of assets under management.

Ackman said he dropped plans to use his SPAC to invest in Universal Music Group because the Securities and Exchange Commission wasn’t convinced the deal met New York Stock Exchange rules for such vehicles.

Ackman had drafted a first-of-its-kind approach on the Universal Music deal that set it apart from a typical SPAC takeover of a privately held company. Ackman’s SPAC only wanted a 10% position, then planned to search for another related business to bring into the fold through an acquisition.
 
In April, Goldman Sachs & Co. valued UMG at $53 billion, up from a $36 billion estimate a year earlier.