PSTH stock investors got an update on the Universal Music deal ahead of an investor day on Wednesday.
SPAC investors watching what’s next fromPershing Square Tontine Holdings (NYSE:PSTH) seem to be giving the firm’s latest update a big “meh” from the look of this morning’s activity, or lack thereof. PSTH stock was little changed as of 10:00 a.m. Eastern.
Readers mayrecall that PSTH stock shed 7%in the June 4 pre-market before closing down almost 12% for the day after the company announced it would take a stake inUniversal Music Group (UMG).
Yesterday, the Bill Ackman-led special purpose acquisition companypublished an updateon its deal with France’s Vivendi (OTCMKTS:VIVEF) to acquire 10% of its music business for approximately $4 billion.
A review of that update shows not much has changed about the deal since the announcement earlier this month. However, it is worth noting that:
- Pershing Square, as the sponsor of the SPAC, will waive its right to receive sponsor warrants in the transaction, opting, instead to receive warrants only in the merger entity (RemainCo).
- Dilution from the treatment of director warrants has effectively been eliminated, with the strike price changed from $24 per share to 20% about the net asset value of the merger entity.
- The SPAC, in early July, will give PSTH stock holders the opportunity to tender their shares for $20 a piece. Even after tendering their shares, holders will continue to own the 1/9th distributable redeemable warrant per PSTH share, unless it was previously sold.
- The SPAC will remain a publicly traded company with $1.5 billion of cash after the distribution of UMG shares and will continue to seek a new business combination partner.
An investor day with a further update is scheduled fortomorrow,June 23.
Meanwhile Vivendi shareholders approved on Tuesday the company’s plan to spin off UMG, with 99.9% of the votes in favor, Vivendi said in apress release.AccordingtoThe Wall Street Journal, UMG, home to stars including Taylor Swift, Billie Eilish and Queen, operates the world’s second-largest music publishing company. It has a 40% market share of the U.S. market and 30% globally.
Patience Wearing Thin for PSTH Stock Investors
Investors have been waiting somewhat patiently for Ackman’s SPAC to make a full-fledged merger move. The fund manager said in late March, “Eight months since PSTH’s launch, we remain convinced that an investment in PSTH will generate highly attractive long-term returns, even from PSTH’s current stock price,” Reuters reported.
Last month, he told a Wall Street Journal interviewer, “We’re either going to get a transaction done in the next relative short term — weeks — or we’ll be onto the next one.” In May, Ackman’s Pershing Square investment management firm “bought a roughly 6% stake” in Domino’s Pizza (NYSE:DPZ)
Once a deal closes with Pershing Square Tontine, Ackman has also mentioned there would be a Pershing Square Tontine II investment opportunity.