Taylor Swift got the most complex SPAC deal

Source: Morning Wrap

The world’s largest SPAC is getting a deal now: it will buy 10% of Universal Music Group - the one behind Taylor Swift… perhaps the most complicated ever.


I am curious 🤔 How complex is it?


+ Better to recall the definition of SPAC first: It’s a shell company created to bring others public by going public first and then acquiring them. SPAC is the abbreviation of “special purpose acquisition company”.


Take a deep breath… here we go. 🤯

  • Billionaire Bill Ackman’s shell company PSTH will buy 10% of Universal, but will not bring Universal public in the US. Universal will go public in Amsterdam instead.
  • After the acquisition, PSTH will no longer be treated as a SPAC on the stock exchange as it no longer fulfills the definition but will remain listed.
  • The SPAC will roll into a SPARC (R for rights)... and it’s able to do another acquisition later on.

Wait, is this truly a SPAC deal?

It’s one of a kind… as it runs differently from all existing SPAC deals. SPAC investors are also treated differently here: they will know the acquisition target beforehand. If they don’t like Universal - free to go.


Investors appear cautious on the deal. Shares in Ackman’s SPAC plunged 14% in after-hours trading after the news release, before reversing some of its losses. Probably because it’s so unique for those SPAC investors…?🤔


Or perhaps we should call this a SPARC deal instead?


Share with your friends

Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp
Share on email

Previous stories

GAME

PUBG is going public

South Korea is expecting its largest go-public in history… from Krafton.

Finance

Big 4 cannot be big

We all know the Big 4 accounting firms – PwC, EY, Deloitte and KPMG… they are large, they are important. So Bojo may need a better plan to rein in them.

Housing

Warning! Bubble trouble is coming

As we may or may not notice, the global housing markets are flashing the kind of warnings that have been seen before the 2008 financial crisis. 🏠

Morning

Wrap

Top 3 financial news, wrapped up in 5 minutes

delivered to your mailbox everyday 9am for free