Bill Ackman
Bill Ackman Firm Calls Lawsuit Focused on UMG Investment Effort ‘Fatally Flawed’
The failed deal put a spotlight on PSTH’s structure as a blank check company, formally termed a SPAC, or “special purpose acquisition company.” SPACs typically function like reverse initial public offerings: They raise money as a public shell company ahead of time, and then use those funds to acquire a private company and thus take it public. But PSTH took a slightly different route, using the money it had raised from investors in an effort to buy shares of UMG. Filed in August by an investor, the case claimed that PSTH was not actually a SPAC at all. Claiming the company had only purchased securities, the lawsuit said the company was more akin to a traditional investment firm, like a hedge fund. As a result, the lawsuit said PSTH ought to be regulated under a differ...
Who Is Bill Ackman, UMG’s New Anchor Investor?
PSTH is sponsored by three investment funds managed by Pershing Square Capital Management, the storied New York-based hedge fund. PSTH has $5 billion available to invest in UMG through a $4 billion IPO on Sept. 11, 2020, on the New York Stock Exchange, at $20 a share and an additional $1 billion investment by Pershing Square. In addition, Pershing Square purchased $1 billion of units, each worth one share of Class A common stock and one-third of a redeemable warrant, at $20 per unit. It can buy an addition $2 billion of units in private placements. The PSTH-UMG deal would be unusual because SPACs typically target companies that want to go public. The SPAC, nothing more than shell company, acquires the target in what’s called a reverse merger, thereby al...
