Pershing Square Tontine Holdings, Limited

Pershing Square Tontine Holdings, Limited

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION: Universal Music Group (Terminated on 7/19/21)

ENTERPRISE VALUE: $42.4 billion

Pershing Square Tontine Holdings, Limited proposes to acquire 10% of the outstanding Ordinary Shares of Universal Music Group for approximately $4 billion, the world leader in music-based entertainment.

With a broad array of businesses engaged in recorded music, music publishing, merchandising and audiovisual content in more than 60 countries. Featuring the most comprehensive catalog of recordings and songs across every musical genre, UMG identifies and develops artists and produces and distributes the most critically acclaimed and commercially successful music in the world. Committed to artistry, innovation and entrepreneurship, UMG fosters the development of services, platforms and business models in order to broaden artistic and commercial opportunities for our artists and create new experiences for fans. Universal Music Group is a Vivendi company.

Since 2014, Vivendi has built a world-class media, content and communications group. The Group owns leading, strongly complementary assets in music (Universal Music Group), television and movies (Canal+ Group), communications (Havas Group), publishing (Editis), magazines (Prisma Media), video games (Gameloft), live entertainment and ticketing (Vivendi Village).


The transaction with Universal Music Group (UMG) was announced to be terminated on July 19, 2021.  

As a result, PSTH is withdrawing its Redemption Tender Offer and related Warrant Exchange Offer.

“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.”

“PSTH has 18 months remaining to close a new transaction unless extended by the vote of our shareholders. In light of our recent experience, our next business combination will be structured as a conventional SPAC merger.”


PSTH commenced it’s tender offer for shares and tender offer for warrants on July 9, 2021

Tender Offer for Shares
Redemption Deadline: 11:59pm (ET) August 5, 2021
Redemption Price: $20.0113

Tender Offer for Warrants
Exchange Ratio: 0.2650 shares
Exchange Deadline: 11:59pm (ET) August 9, 2021


  • PSTH shareholders will own three separately traded securities following the completion of the Transaction and the issuance of rights by SPARC:
    • One pro-rata share of UMG Ordinary Shares, which at cost, including transaction expenses, represents approximately $14.75 per PSTH share
    • One pro-rata share of PSTH after the distribution of the acquired UMG shares (“PSTH Remainco”), which will have approximately $5.25 in cash per share
    • One transferable SPARC Warrant to purchase SPARC shares at $20 per share
  • PSTH to acquire approximately 10% of the outstanding Ordinary Shares of UMG (the “UMG Shares”). Unlike most SPAC business combinations, PSTH and UMG will not combine into one company following the Transaction.
    • Following PSTH’s acquisition of the UMG Shares, UMG will complete its previously announced listing on Euronext Amsterdam (the “Listing”) in the third quarter of 2021. Once the Listing is complete, PSTH will distribute the UMG Shares directly to PSTH’s shareholders in a transaction registered with the Securities and Exchange Commission
  • As the Transaction is structured as a stock purchase and not as a merger, the Redeemable Warrants and the Director and Sponsor Warrants (collectively the “PSTH Warrants”) will not become exercisable for shares of UMG. As a result, UMG will not issue warrants in respect of any of the PSTH Warrants, and will not have any warrants outstanding.

psth 3

psth 4

psth 2

psth 1


  • After funding the UMG purchase and related transaction expenses, PSTH Remainco will have $1.5 billion in cash and marketable securities. In addition, the Forward Purchase Agreements will be amended to provide that the Pershing Square Funds will continue to have the right, but not the obligation, to buy approximately $1.4 billion of PSTH’s Class A common shares to fund PSTH’s future business combination transaction. The Pershing Square Funds will own approximately 29% of PSTH Remainco before the exercise of any Additional Forward Purchase Agreements.
    • PSTH Remainco intends to remain listed on the NYSE. Because the transaction will satisfy the requirements of an initial business combination, PSTH Remainco will no longer be treated as a SPAC under NYSE listing rules.
  • An affiliate of our Sponsor has formed an entity that will be known as Pershing Square SPARC Holdings, Ltd. (“SPARC”), which is a Cayman Islands Corporation.
    • SPARC is not a SPAC. It is a Special Purpose Acquisition Rights Company. Unlike a traditional SPAC, SPARC does not intend to raise capital through an underwritten offering in which investors commit capital without knowing the company with which SPARC will combine.
    • Instead, SPARC intends to issue SPARC warrants to acquire common stock in SPARC for $20.00 per share to PSTH shareholders which can only be exercised after SPARC enters into a definitive agreement for its initial business combination. The SPARC warrants are expected to trade on the NYSE and have a term of five years, subject to extension.
      • One SPARC Warrant will be distributed for each share of PSTH Class A Common Stock outstanding on the record date shortly following the completion of the Redemption Tender Offer and Warrant Exchange Offer. Assuming all SPARC warrants are exercised, SPARC will raise $5.6 billion of cash from SPARC holders. SPARC is expected to enter into forward purchase agreements with affiliates of the Pershing Square Funds, the SPARC’s sponsor, for a minimum investment of $1 billion, and up to $5 billion, subject to increase with SPARC’s board consent.
      • Holders who elect to exercise their SPARCs will also receive the right to exercise a proportionally greater amount of SPARC warrants to the extent that other holders of SPARC warrants do not exercise their SPARC warrants.
    • The SPARC Sponsor is expected to purchase preferred shares convertible for up to ten years at $24.00 per share into 4.95% of the outstanding shares of the post-combination entity on a fully diluted basis
      • (i) paying $24.00 per share
      • (ii) by converting on a “cashless” basis and receiving an amount of outstanding shares with a value equal to the market value of such 4.95% of shares in excess of $24.00 per share.


  • The Transaction will not require a vote of PSTH’s shareholders. PSTH will satisfy its shareholders’ redemption rights by tendering for its shares at a price equal to PSTH’s cash-in-trust per-share, or approximately $20 per share (the “Redemption Tender Offer”). The Redemption Tender Offer is expected to be launched shortly following the execution of the definitive transaction documentation.
  • A requirement that PSTH certifies to Vivendi that RemainCo will hold at least $1 billion of cash


  • Documents not filed yet


  • Perella Weinberg Partners acted as exclusive financial advisor to the PSTH Board of Directors.
  • Sullivan & Cromwell LLP and Cadwalader, Wickersham & Taft LLP, acted as legal advisors to PSTH.
  • Cabinet Bompoint and Cleary Gottlieb Steen & Hamilton LLP acted as legal advisors to Vivendi.
  • Freshfields Bruckhaus Deringer LLP acted as legal advisor to UMG.


Executive Officers

William A. Ackman, 54
Chairman & Chief Executive Officer; Director

Mr. Ackman founded Pershing Square in 2003, and is principally responsible for its investment policies and implementation. Mr. Ackman has spent 28 years in the investment management industry. Prior to forming Pershing Square, he co-founded Gotham Partners Management Co., LLC, an investment adviser that managed public and private equity and hedge fund portfolios. Mr. Ackman is currently Chairman of the Board of the Howard Hughes Corporation, and a member of the Investment Advisory Committee of the Federal Reserve Bank of NY. Mr. Ackman received his Bachelor of Arts degree from Harvard College, where he graduated magna cum laude, and received his Masters in Business Administration from Harvard Business School.

Ben Hakim, 44
Chief Financial Officer

Mr. Hakim is a Partner at Pershing Square and joined the investment team in 2012. Mr. Hakim was previously a Senior Managing Director at The Blackstone Group, where he worked in the Mergers & Acquisitions group for 13 years. Mr. Hakim received his Bachelor of Science from Cornell University in 1997.


Board of Directors

Lisa Gersh, 61

Lisa Gersh co-founded Oxygen Media (“Oxygen”) in 1999 and remained its President and Chief Operating Officer until the company’s sale to NBC in 2007 for $925 million. Oxygen was the first ever multi-platform brand and created content for women, by women, and reached 74 million homes at the time of its sale. Following the sale of Oxygen, Ms. Gersh joined NBC and spearheaded NBC’s acquisition of the Weather Channel, serving briefly as its interim Chief Executive Officer. Also at NBC, Ms. Gersh launched Education Nation, a transformative education initiative that established NBC as the media authority on education. In 2011, Ms. Gersh took over the operations of Martha Stewart Living Omnimedia, Inc. (“Martha Stewart”), first as President and later as its Chief Executive Officer. During her tenure, Ms. Gersh rebranded Martha Stewart, materially reduced its operating expenses, and returned the company to profitability. In 2014, Ms. Gersh transformed Gwyneth Paltrow’s blog, Goop, Inc. (“Goop”) into the first contextual commerce brand. In the process of taking Goop from a collection of recommendations to a freestanding brand, Ms. Gersh oversaw, among other things, the launch of Goop’s e-commerce store, skincare and fashion lines and created Goop’s pop-up retail strategy. In 2017, Ms. Gersh was named Chief Executive Officer of Alexander Wang, a global fashion brand based in New York City. A graduate of Rutgers Law School, Ms. Gersh began her career as a lawyer, first as a litigation associate at Debevoise & Plimpton LLP, and then as a Partner at Friedman, Kaplan, Seiler & Adelman LLP, a boutique law firm specializing in complex litigation and commercial transactions, which Ms. Gersh co-founded, and which today has more than 50 lawyers. Currently, Ms. Gersh sits on the board of directors of Hasbro, Inc., where she chairs the Compensation Committee, and Establishment Labs Holdings Inc., where she chairs the Nomination and Governance Committee. She also serves on the board of directors of the Bail Project, Inc. and the Samsung Retail Advisory Board. Ms. Gersh previously served on the board of directors of comScore, Inc.

Michael Ovitz, 73

Michael Ovitz co-founded Creative Artists Agency (CAA) in 1974 and served as its Chairman until 1995. Over that 20-year period, he grew the agency from a start-up organization to the world’s leading talent agency, representing more than 1,000 of the most notable actors, directors, musicians, screenwriters and other personalities in the entertainment industry including Martin Scorsese, Sean Connery, Robert Redford, Paul Newman, Robert DeNiro, Al Pacino, Bill Murray, Dustin Hoffman, Steven Spielberg, David Letterman, Meryl Streep, Barbara Streisand, Michael Crichton and Michael Jackson. In his journey from the mailroom to media mogul, Mr. Ovitz launched the most powerful agency in the world (to date), sold three major Hollywood studios, executed all marketing and advertising for The Coca-Cola Company (including creating the Polar Bear Campaign) and was at the forefront of the digital revolution making alliances with Intel Corporation and other early Silicon Valley companies. Mr. Ovitz also served as President of the Walt Disney Company, from October 1995 to January 1997. In 2010, Mr. Ovitz founded the venture capital fund Broad Beach Ventures LLC, a portfolio of over thirty companies. He has been a senior advisor to Palantir Technologies for over 10 years and has invested in and advised companies from startups to black swans. He was instrumental in the creation of venture capital firm Andreessen Horowitz and frequently consults for Founders Fund, 8VC and many other firms. In 2018, Mr. Ovitz wrote and published his memoir Who Is Michael Ovitz?, which was on the long list for The Financial Times and McKinsey Business Book of the Year Award. Mr. Ovitz is a graduate of University of California, Los Angeles and helped rebuild the UCLA Medical Center in 1997 while serving as its Chairman for over a decade. Mr. Ovitz is also a notable art collector and serves on The Board of Trustees at The Museum of Modern Art in New York City.

Jacqueline Reses, 50

Jacqueline D. Reses serves as the Head of Square Capital, LLC, a wholly owned subsidiary of Square, Inc. (“Square”), which focuses on facilitating small business credit to businesses which have been locked-out of traditional sources of capital. Ms. Reses expects to serve as the Executive Chairman of Square Financial Services, a conditionally approved FDIC-insured bank owned by Square. Prior to Square, Ms. Reses was the Chief Development Officer of Yahoo! Inc. and the head of the U.S. media group at Apax Partners Worldwide LLP one of the largest global private equity firms. Ms. Reses also spent seven years at Goldman Sachs in mergers and acquisitions and the principal investment area. She previously served on the board of directors of Alibaba Group Holdings Limited, China’s largest mobile commerce company and Social Capital Hedosophia Holdings Corp. Ms. Reses sits on the boards of directors of Social Capital Hedosophia Holdings Corp. III and a number of privately held companies, as well as the Economic Advisory Council of the Federal Reserve Bank of San Francisco, the Board of Directors of the Wharton School of the University of Pennsylvania and National Public Radio (NPR). Ms. Reses is also currently serving on California Governor Newsom’s Task Force for Business and Jobs Recovery. Ms. Reses received a bachelor’s degree in economics with honors from the Wharton School of the University of Pennsylvania.

Joseph S. Steinberg, 76

Joseph S. Steinberg is Chairman of the Board of Directors of Jefferies Financial Group Inc., and from January 1979 until March 1, 2013 served as President of Leucadia National Corporation (now Jefferies Financial Group Inc.). He has also been a director of Jefferies Group since 2008, Crimson Wine Group since 2013 and served as a director of HomeFed Corporation from August 1998 and Chairman of the Board from December 1999 until its acquisition by Leucadia National Corporation in 2019. Mr. Steinberg has previously served as a director of Spectrum Brands Holdings, Inc., Mueller Industries, Inc., Fidelity & Guaranty Life and Fortescue Metals Group Ltd. Mr. Steinberg has managerial and investing experience in a broad range of businesses through his more than 40 years as President and a director of Leucadia National Corporation and now Chairman and a director of Jefferies Financial Group Inc.