Pershing Square Hikes Stake in Justin Bieber and Taylor Swift’s Music Publisher

Hedge fund management firm Pershing Square is hiking its stake in Universal Music Group to 10%, Reuters reported.

Pershing Square will acquire an additional 2.9% of UMG from Vivendi for $1.149 billion, based on the UMG’s enterprise value of 35 billion euros or $41.40 billion for 100% of its share capital.

The transaction is expected to be finalized by September 9, which will make Pershing Square’s stake 10% after it purchased a 7.1% stake from Vivendi earlier this month.  Some 60% of UMG’s share capital will be distributed to Vivendi shareholders.

Vivendi will use the proceeds to cut down its financial debt and to fund share buybacks and acquisitions. Its other assets include Canal+, Havas, Gameloft, and Dailymotion.

Pershing Square Founder and Chief Executive Bill Ackman earlier planned to invest in UMG via a particular purpose acquisition company but found difficulties and instead proceeded through the firm.

UMG has benefitted from a rebound in the music industry following a recent surge in vinyl records and CD sales. Popular artists include Justin Bieber and Taylor Swift. It is slated to go public in September. VIV is down 1.55%.