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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

Updated 1 hour ago - Science

NTSB probes crash that killed 10 in Alabama as storm lashes Southeast

Flash-flooding in Bloomington, Indiana, on Saturday. Photo: Jeremy Hogan/SOPA Images/LightRocket via Getty Images

The National Transportation Safety Board announced Sunday that it's investigating a fiery multi-vehicle weekend crash in Alabama that killed 10 people, including nine children, as storms swept the Southeast.

The big picture: Saturday's crash on Interstate 65, south of Montgomery, occurred amid a tropical depression that left 13 people dead in Alabama as it triggered flash floods and spawned tornadoes that razed "dozens of homes" over the weekend, per AP.

Laurel Hubbard to become 1st openly trans athlete to compete at Olympics

New Zealand's Laurel Hubbard at the Gold Coast 2018 Commonwealth Games in Australia, when she became the first openly transgender athlete to represent NZ. Photo: Scott Barbour/Getty Images

The New Zealand Olympic Committee has announced that Laurel Hubbard has been selected for the women's weightlifting team for the Tokyo Games — making her the first openly transgender athlete to compete at the event.

The big picture: Hubbard, 43, is part of a five-member Kiwi weightlifting team and will compete in the women's super heavyweight category. Meanwhile, BMX rider Chelsea Wolfe will become the first openly trans athlete to travel to the Olympics with Team USA, when she arrives in Tokyo as a reserve rider.

American Airlines cuts hundreds of flights amid demand surge

Photo: Joe Raedle/Getty Images

American Airlines announced Sunday that it's cutting some 950 flights from its schedule, including 296 this weekend, to reduce potential pressure on its operations, the Wall Street Journal first reported.

Driving the news: The U.S. vaccine rollout has led to a massive increase in travel bookings. The airline noted in an emailed statement that it's facing an "incredibly quick ramp up of customer demand."