Pershing Square Tontine Holdings, Ltd. (NYSE:PSTH) CEO Bill
Ackman today issued the following letter.
July 19, 2021
Dear PSTH Shareholder,
Yesterday, our board of directors unanimously determined not to
proceed with the Universal Music Group transaction, and to assign
our share purchase agreement to Pershing Square Holdings, Ltd.
(LN:PSH) (LN:PSHD) (NA:PSH) and affiliates (“PSH and affiliates” or
“Pershing Square”). Pershing Square has also agreed to assume the
Vivendi indemnity agreement and our UMG transaction costs.
In light of these developments, PSTH is withdrawing its
Redemption Tender Offer and related Warrant Exchange Offer.
Our decision to seek an alternative initial business combination
(“IBC”) was driven by issues raised by the SEC with several
elements of the proposed transaction – in particular, whether the
structure of our IBC qualified under the NYSE rules.
We and our counsel had multiple discussions with the SEC
attempting to change its position on the issues that it had
identified. Ultimately, our board concluded that it was in the best
interest of shareholders to assign the UMG stock purchase agreement
to Pershing Square (which is specifically permitted under the terms
of the agreement with Vivendi) as it did not believe PSTH would be
able to consummate the transaction in light of the SEC’s position.
Management and the board believe that greater shareholder value can
be created by working expeditiously to identify a new merger
partner.
PSTH has 18 months remaining to close a new transaction unless
extended by the vote of our shareholders. In light of our recent
experience, our next business combination will be structured as a
conventional SPAC merger.
While we are disappointed with this outcome, we continue to
believe that the unique scale and favorable structure of PSTH will
enable us to find a transaction that meets our standards for
business quality, durable growth, and a fair price. We are highly
economically and reputationally motivated to consummate a
successful transaction. We will, however, only complete a deal that
meets our high standards.
Our share price has fallen by 18% since the transaction was
announced on June 4th. While we believe our shareholders recognize
UMG’s extraordinary attributes including its attractive growth
characteristics, business quality, and superb management team, we
underestimated the reaction that some of our shareholders would
have to the transaction’s complexity and structure. We also
underestimated the transaction’s potential impact on investors who
are unable to hold foreign securities, who margin their shares, or
who own call options on our stock.
While management and the board clearly understood that the
intricacies of our transaction structure could affect its
attractiveness in the short term, we believed that substantial
shareholder value would have emerged over the intermediate to long
term from the sum of the parts that were created in the
transaction, namely: (1) UMG, (2) PSTH RemainCo, and (3) warrants
on Pershing Square SPARC Holdings, Ltd. Furthermore, we expected
that the transaction’s structural issues would largely be resolved
by the end of this year.
While PSTH shareholders will not receive UMG stock, UMG will
become a public company when it is listed on Euronext Amsterdam in
September.
None of us anticipated this outcome. Yet, despite the inability
of PSTH to consummate the UMG transaction, our counterparty was not
left at the altar. Pershing Square will be fulfilling PSTH’s
commitment to Vivendi. Pershing Square intends to be a long-term
UMG shareholder, and will endeavor to work with UMG management to
help create value for all stakeholders.
We are devoting our full resources to identifying and
consummating a new transaction for the benefit of PSTH
shareholders. We remain extremely grateful for your patience and
support.
Sincerely,
William A. Ackman
Important Additional Information and Where to Find It
This press release does not constitute an offer to sell or buy
or the solicitation of an offer to buy or sell any securities. This
communication is not a recommendation to buy, sell or exchange any
securities, and it is neither an offer to purchase nor a
solicitation of an offer to sell securities. Information about PSTH
and certain of the matters discussed in this press release is
available at the SEC’s website at www.sec.gov.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws. These
forward-looking statements generally are identified by the words
"believe," "project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result,"
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this release. You should carefully
consider these and the other risks and uncertainties described in
PSTH’s annual report on Form 10-K and other documents PSTH has
filed with the SEC. Those filings identify and address other
important risks and uncertainties that could cause actual events
and results to differ materially from those contained in the
forward-looking statements. Forward-looking statements speak only
as of the date they are made. Readers are cautioned not to put
undue reliance on forward-looking statements, and PSTH assumes no
obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information,
future events, or otherwise. PSTH does not give any assurance that
PSTH will achieve its expectations. The inclusion of any statement
in this press release does not constitute an admission by PSTH or
any other person that the events or circumstances described in such
statement are material.
About Pershing Square Tontine Holdings, Ltd.
Pershing Square Tontine Holdings, Ltd., a Delaware corporation,
is a blank check company formed for the purpose of effecting a
merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with a private
company. PSTH is sponsored by Pershing Square TH Sponsor, LLC (the
“Sponsor”), an affiliate of Pershing Square Capital Management,
L.P., a registered investment advisor with approximately $14
billion of assets under management. www.PSTontine.com
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210718005033/en/
Media Contact: Fran McGill 212-909-2455 McGill@persq.com
Pershing Square Tontine (NYSE:PSTH)
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