Bill Ackman drops SPAC plan for Universal deal

Following criticism from regulators and investors, Billionaire investor Bill Ackman has opted to buy up to 10% of Vivendi’s Universal Music Group through his main hedge fund, rather than a special purpose acquisition company (SPAC).

The investment had come just ahead of a plan by Vivendi to list and spin-off 60% of Universal to its shareholders, cashing in on booming streaming revenues at the unit behind singers such as Taylor Swift.

Pershing Square, the main hedge fund run by Ackman, will now replace Pershing Square Tontine Holdings (PSTH) as the investor, the group said.

PSTH added in a statement its decision was prompted by issues raised by the U.S. Securities and Exchange Commission (SEC) about whether the deal met New York stock exchange rules.

It did not specify what precise problems the SEC had focused on.

Ackman said the SPAC would try to find a new merger partner. SPACs have to return funds to investors if they do not find a target within a certain time frame.