Pershing Square Tontine Holdings

Being called an investment company is far from the worst corporate insult we can think of… but if you’re a special purpose acquisition company (Spac) it turns out to be a legal headache.

Pershing Square Tontine Holdings is the Spac which recently abandoned plans to buy a stake in Universal Music Group, although another arm of its corporate family is taking the deal on instead.

However, PSTH is now being sued, with Billboard reporting that the lawsuit claims that it is an investment company, not a proper Spac – as it explains: “a legal distinction that determines how Spacs can use its funding and compensate its founders”.

PSTH’s original plan had been to investigate taking Universal Music public via a Spac merger – primer on that here – but after finding regulatory obstacles, it decided to look for another business to pursue such a merger with. This, presumably, will be part of its defence in the lawsuit, if it goes to court.

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