LONDON (ShareCast) - (Sharecast News) - Bill Ackman's Pershing Square Holdings will now look to buy a 10% stake in Universal Music from France's Vivendi after US authorities blocked its attempts to use a special purpose acquisition company (SPAC) - Pershing Square Tontine Holdings - to do the deal.
Pershing announced last month that it had agreed to buy the stake for around $4bn through its SPAC. However, it said on Monday that it has decided not to go ahead with the acquisition in that form after US authorities blocked its attempts to use the SPAC for the purchase.

In a letter to shareholders, Pershing said: "Our decision to seek an alternative initial business combination (IBC) was driven by issues raised by the SEC with several elements of the proposed transaction - in particular, whether the structure of our IBC qualified under the NYSE rules.

"We and our counsel had multiple discussions with the SEC attempting to change its position on the issues that it had identified. Ultimately, our board concluded that it was in the best interest of shareholders to assign the UMG stock purchase agreement to Pershing Square (which is specifically permitted under the terms of the agreement with Vivendi) as it did not believe PSTH would be able to consummate the transaction in light of the SEC's position. Management and the board believe that greater shareholder value can be created by working expeditiously to identify a new merger partner."

The company said that while PSTH shareholders will not receive Universal Music stock, UMG will become a public company when it is listed on Euronext Amsterdam in September.

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