Universal Music Group

June 24, 2021

Billionaire investor Bill Ackman trumpeted his Universal Music deal, nodded to his Reddit fans, and invited company sellers to call him in a presentation this week. Here are the 8 best quotes.

Bill Ackman, Ackman, William Ackman — Bill Ackman.

Reuters/ Allen Fredrickson

Bill Ackman dug into his $4 billion deal to buy 10% of Universal Music in a presentation this week.
The hedge fund manager emphasized music’s timeless appeal and lauded the group’s CEO.
Ackman also mentioned his Reddit fanbase and discussed his proposed SPARC investment vehicle.
See more stories on Insider’s business page.

Billionaire investor Bill Ackman touted his recent deal to buy 10% of Universal Music Group for $4 billion in a presentation on Wednesday. He underscored the power of the music publisher’s business model, ranked its boss among the best CEOs in modern history, and tipped his hat to the Reddit users who cheered him on while he worked to close the transaction.

The Pershing Square Tontine Holdings (PSTH) boss also emphasized the lasting appeal of music, explained the key strengths of his planned special-purpose acquisition rights company (SPARC), and invited private companies that fit his requirements to call him if they want to go public.

Here are Ackman’s eight best quotes from the presentation, lightly edited and condensed for clarity:

1. “We got our first meeting and it was love at first sight. We dug in and really stopped looking at other opportunities because we had found our target.” – discussing the start of talks with Universal about eight months ago.

2. “It was a bit like the dog that grabbed the bumper of the car and wouldn’t let go because this was precisely what were were looking for.” – underscoring how well Universal fit Pershing’s criteria.

3. “If you own Universal Music Group, you own a royalty on people listening to music. I can’t think of an asset that I have more confidence in it being consumed over time, other than food and water. But the difference with music is you can create IP that you can license to others.”

4. “Think about the iconic CEOs that will be remembered. Think about Walt Disney, think about Steve Jobs. Lucian is an executive who will be remembered for his contribution to this industry. He’s a tremendous human being.” – praising Universal CEO Lucian Grainge.

5. “You don’t need to go hire a ton of developers; everyone wants to be a rock star. There are a lot of entrepreneurs working really hard pitching Universal and hoping Universal will back them in their careers. They want Universal because Universal has had better success than anyone else in making you a star.” – explaining why Universal has a better business model than a typical software company.

6. “Analysts value these interests at anywhere between $2 billion and $4 billion if you were to liquidate them all tomorrow. We’re getting those investments ‘free’ and that’s always a good price.” – commenting on Universal’s investments in Spotify and Tencent Music.

7. “There are some excellent analysts on Reddit. There is a community of people that are studying this company.” – nodding to the members of the r/PSTH subreddit who have been closely following his deal since last year.

8. “It takes away the shot clock from us. We’re never going to put money to work because we’re under pressure, but I don’t like that people are waiting for us to do something and their money is sitting there. I feel that burden and this removes that burden.” – highlighting a key advantage of his proposed SPARC vehicle, which differs from a SPAC because it won’t tap investors for cash until it has struck a deal.

9. “If someone needs $1.5 billion to $3 billion and wants to go public tomorrow, call me.” – Ackman emphasized that businesses need to meet Pershing Square’s criteria.

Read the original article on Business Insider

June 7, 2021

Billionaire investor Bill Ackman told a story about his song-writing grandfather that won over Universal Music’s bosses

Bill Ackman’s SPAC is close to buying 10% of Universal Music Group for $4 billion.
Ackman told a story about his grandfather, a songwriter, to win over UMG’s bosses.
UMG executives gifted Ackman two records and the sheet music for his grandfather’s hit song.
See more stories on Insider’s business page.

Bill Ackman’s special-purpose acquisition company (SPAC) is close to buying 10% of Universal Music Group for $4 billion. The billionaire investor might have his grandfather’s musical talents to thank if he manages to seal the deal.

The Pershing Square chief began his first meeting with UMG executives by regaling them with a story about Herman Ackman, The Wall Street Journal reported, citing people involved in the transaction.

Ackman’s grandfather wrote a song called “Put Your Arms Where They Belong (For They Belong to Me)” in 1926, which he sold to music-publishing group Tin Pan Alley for $150. The ditty sold more than 750,000 copies, Ackman told the bosses of the world’s biggest music company, according to The Journal.

The UMG executives later discovered that their company owned the elder Ackman’s recording. They dug up two records of the song and the accompanying sheet music, mounted and framed them, and gifted them to Ackman, The Journal reported.

Vivendi, UMG’s parent company, met with multiple private-equity firms and other investors interested in buying a piece of the division. Ackman’s clear passion for the music business – rooted in his grandfather’s legacy – along with his relationship with management and his vision for growing the company, helped him stand out from the crowd, The Journal said.

Ackman’s SPAC, Pershing Square Tontine Holdings, is the vehicle looking to acquire the UMG stake. PSTH, which joined the stock market last summer, would remain a public company and could have nearly $3 billion to pursue another deal, even if the UMG transaction is successful.

Pershing Square also hopes to launch a new take on SPACs called a SPARC, which won’t lock up investors’ capital while it searches for a deal, and won’t have the pressure to close a deal within two years. Ackman’s proposed SPARC would be armed with up to $11 billion to pursue a business combination.

Read the original article on Business Insider

June 4, 2021

Billionaire investor Bill Ackman’s SPAC is close to striking a deal with Universal Music, report says

Bill Ackman’s SPAC is close to striking a deal with Universal Music, The Wall Street Journal said.
Pershing Square Tontine Holdings could agree a transaction valuing the music group at $40 billion.
Universal Music, a division of Vivendi, racked up $9 billion in revenue last year.
See more stories on Insider’s business page.

Billionaire investor Bill Ackman’s special-purpose acquisition company (SPAC) is close to agreeing a transaction with Universal Music Group that would value the music titan at $40 billion, The Wall Street Journal reported on Thursday, citing people familiar with the matter.

Ackman’s Pershing Square Tontine Holdings might finalize the megadeal in a matter of weeks, although it could still fall through, sources told The Journal. PSTH shares fell as much as 8% in aftermarket trading after the news broke.

Universal Music, which represents artists including Taylor Swift and Billie Eilish, is currently owned by Vivendi, a French media conglomerate. The segment grew constant-currency revenue by 5% to 7.4 billion euros ($9 billion) last year, and operating income by 20% to 1.4 billion euros, Vivendi’s latest annual report shows.

Vivendi disclosed in mid-May that it was considering selling 10% of Universal Music to an “American investor” – which may be Ackman – or pursuing a public offering of 5% to 10% of the segment’s shares. Tencent, a Chinese technology conglomerate, doubled its stake in Universal Music to 20% last year, valuing the business at 30 billion euros.

Ackman, the boss of Pershing Square Capital Management, said last month that his team had identified an “iconic, phenomenal, great business” back in November 2020, and he hoped to strike a deal to purchase a piece of it within the next few weeks. He said the target was so attractive and interesting that it was “worth the energy and the effort.”

The hedge fund manager took PSTH public last summer with the goal of spending around $5 billion for a minority stake in a private business. Ackman’s reputation as a top investor – boosted by his lucrative pandemic hedge and his fund’s 70% gain last year – and the size of his SPAC prompted intense speculation about his possible target.

Pershing Square Capital Management declined a request for comment from Insider.

Read the original article on Business Insider