Ackman’s Pershing Square SPAC nearing $40-billion deal with Universal Music Group – sources

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(Reuters) – Billionaire investor William Ackman’s blank-check firm Pershing Square Tontine Holdings is nearing a deal with Universal Music Group that would value the company at nearly $40 billion, people familiar with the matter said.

A deal of that size, if completed successfully, would mark the biggest-ever merger involving a so-called special purpose acquisition company (SPAC), similar in size to the $40-billion deal that ride-hailing giant Grab Holdings clinched in April.

Pershing Square’s shares were down nearly 12% in after-market trade, after news of the potential deal broke.

SPACs like Pershing Square Tontine raise money in an initial public offering with the aim of merging with a private company. For the private company, the process is an alternative to it doing an IPO.

In May, Ackman told investors on a quarterly call that his team was “working to complete the transaction” and that he likes the business and loves the management team, without naming the company that Pershing Square was in talks with.

The Wall Street Journal reported the news earlier on Thursday.

A spokesman for Pershing Square Tontine declined to comment. Universal Music Group did not immediately respond to a Reuters request for comment.