UPDATED: Billionaire investor Bill Ackman announced early Monday that he has decided not to use his SPAC to acquire a 10% stake in Universal Music Group after the Securities and Exchange Commission voiced concerns about the the complicated agreement, which would have been the biggest SPAC transaction to date.

However, Ackman plans to use his hedge fund to buy the stake — now between 5 and 10% — directly instead. UMG parent company Vivendi had previously announced that UMG would be spun off as a standalone entity to trade on Euronext after it distributes 60% of UMG to its shareholders by September. It confirmed in an announcement that if Ackman’s share is less than 10%, it will sell the shortfall to other investors.

Earlier this year, Ackman’s special purpose acquisition company, Pershing Capital, unveiled plans to acquire 10% of the world’s largest music company, which was valued at more than $40 billion. Pershing Square also owns stakes in Chipotle, Domino’s Pizza, the Lowe’s home improvement chain and Hilton Hotels but had not previously held any other media or entertainment properties.

In a letter to investors cited by the New York Times and other outlets, Ackman said Pershing had failed to change the agency’s mind about the deal. Investors in the SPAC, which is called Pershing Capital Tontine Holdings, seemed to lack confidence in the deal: Its shares had dropped in value by nearly 20% since the deal was announced early in June.

“Our share price has fallen by 18 percent since the transaction was announced on June 4,” Ackman wrote, noting that the SEC raised issues “with several elements of the proposed transaction – in particular, whether the structure of our initial business combination qualified under the New York Stock Exchange rules.

“We underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure.”

The terms of the arrangement called for the SPAC to invest $4 billion for 10 percent of UMG, which parent company Vivendi had Additionally, China’s Tencent acquired 20% of UMG, leaving 20% to Vivendi, to which it was considering selling half, as reported by Variety on May 18.

Pershing Square Tontine now has 18 months to find and close a new deal, unless shareholders give it more time, and “our next business combination will be structured as a conventional SPAC merger,” Ackman said.

While Ackman was not specific about the SEC’s objections, he did speak a bit on the issue during a long interview with CNBC on Monday. “Universal is going to be a Dutch listed company — people didn’t love that,” he said, “but we believed by the time that we distributed the stock to shareholders, it would likely be hopefully a New York Stock Exchange listed company. So each of these problems, if you could hold the stock for six months, I think people would do very, very well. But unfortunately, I would say a meaningful percentage of our investors needed to hold it for a much shorter period of time and the, you know, it had a negative impact on them and that that I think has driven the stock down.”