Ackman’s SPAC Slumps After Universal Music Deal Irks Investors

(Bloomberg) -- Bill Ackman’s blank-check company suffered its worst stock decline since September after announcing a complex music-industry deal that perplexed investors and analysts.

The special purpose acquisition company, called Pershing Square Tontine Holdings Ltd., fell as much as 12% in New York to $22.02. While that’s still above its listing price of $20, it’s far below the high of almost $33 hit earlier this year.

Ackman’s firm drew the cool reaction after saying it was in talks to buy 10% of Universal Music Group from Vivendi SE in a deal that would value the record company at about $42 billion, including debt. SPACs typically pursue mergers with closely held companies -- and that’s the kind of deal investors assumed Ackman was ready to announce.

Instead, Pershing Square Tontine will remain listed with $1.5 billion in cash and continue to search for a new business combination.

The announcement came in the middle of the night U.S. time, with Ackman tweeting that it was coming. He thanked his investors for their patience, and announced he was going to sleep.

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