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Illustration: Aïda Amer/Axios

Pershing Square Tontine, the SPAC formed last summer by Bill Ackman, confirmed that it's in talks to buy a 10% stake in Universal Music Group from Vivendi at a $40 billion enterprise value.

The big picture: At first glance, this isn't what Tontine was formed to do. Or what any SPAC is formed to do, since they're expected to buy/merge private companies. It also had expected to sign a deal in 2020, per this Axios Re:Cap interview with Ackman last July.

  • Tontine raised more money than any SPAC in history and its prospectus repeatedly mentioned an interest in "mature unicorns." This led to lots of speculation that it would try to buy a company like Airbnb or Stripe, and word is that it did at least try to kick those sorts of tires.
  • The prospectus also mentioned private equity-owned and family-owned businesses (e.g., Bloomberg), although I can't find anything in there about corporate carveouts.

The twist: Tontine plans to also form what it's calling a SPARC, or special purpose acquisition rights company, seeded with cash that's not going to Universal.

  • This is different from the recent "Spinning Eagle" effort, which wanted to use stub cash to form a new SPAC (until the SEC suggested it not).
  • Instead, the SPARC will only collect cash from investors once it's identified a target and published a prospectus. At that point investors can either buy in, or trade their "rights" to the SPAC, which one source says is expected to trade pre-announcement in the $5 to $8 range.
  • The SPARC is expected to have the same official investment strategy as the original Tontine SPAC, and at least $6.5 billion at its disposal. Airbnb might be off the table, but Stripe and Bloomberg are still kicking around.

Investor reax: Tontine shares tanked on the news, which means Ackman has an uphill battle to convince "Tontards" that he got them a much better price than what they could get buying Universal on the open market (since Vivendi already had signaled plans to list it).

  • Investors might also be unhappy that they won't get a vote on the Universal deal. Pershing Square instead plans to satisfy redemption rights via a tender offer, which is certainly something that the SEC will review.

The bottom line: Bill Ackman is many things. Boring isn't one of them.

Go deeper

Trump voices support for Saturday's pro-Capitol riots rally

Photo: Tayfun Coskun/Anadolu Agency via Getty Images

Former President Trump on Thursday expressed solidarity with people facing prosecution in connection to the Capitol insurrection.

Why it matters: The statement was issued ahead of Saturday's rally to protest the treatment of Capitol rioters. Over 600 known federal defendants face charges related to the Jan. 6 insurrection.

Clinton-linked lawyer indicted in investigation of FBI's Russia probe

Photo: Eric Baradat/AFP via Getty Images

A grand jury has returned an indictment against Michael Sussmann, a lawyer whose firm represented the 2016 Clinton campaign, for lying to the FBI about not representing "any client" when he presented them with allegations about a secret Trump Organization back-channel to a Russian bank.

Why it matters: It's the second criminal charge stemming from special counsel John Durham's review of possible misconduct by the intelligence community and prosecutors who investigated the 2016 Trump campaign's ties to Russia.

Federal judge blocks Biden administration's use of Title 42 policy

Photo: Stefani Reynolds/Bloomberg via Getty Images

A federal judge on Thursday blocked the Biden administration from enforcing a public health order that fast-tracked deportations of migrant families at the southern border.

Why it matters: President Biden has faced significant backlash for retaining the Trump-era policy, which was implemented as a COVID containment measure. The expulsions deny adult migrants and families the chance for asylum.