Ackman on the hunt for ‘mature unicorns’ following $4 billion blank-check IPO

July 22, 2020, 4:07 PM UTC

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Large, venture-backed businesses that haven’t gone public yet be advised: billionaire investor Bill Ackman now has at least $4 billion in his back pocket ready to put toward a bumper acquisition.

Ackman’s blank-check company — the latest in a slew of special purpose acquisition companies that have hit the market in recent months — sold 200 million units for $20 apiece, according to a statement. Pershing Square Tontine Holdings Ltd., backed by Ackman’s Pershing Square Capital Management, is set to begin trading Wednesday on the New York Stock Exchange.

Funds associated with Ackman’s investment firm have committed to deploy as much as $3 billion more to the vehicle, bringing the total funding as high as $7 billion, according to filings with the U.S. Securities and Exchange Commission.

Listings by SPACs have reached an all-time high, with more than $13.5 billion raised this year on U.S. exchanges, according to data compiled by Bloomberg. Billionaires, private equity firms, former C-suite executives and dealmakers have all joined the party.

Martin E. Franklin, a founder of Jarden Corp., is working with investment banks on a blank-check company. Former Citigroup Inc. banker Michael Klein has filed for his fourth SPAC while his second — Churchill Capital Corp. II — is in merger talks with Topgolf International Inc., Bloomberg News has reported.

Gores, Burkle

This month there have been 12 filings for SPACs in the U.S., the data show, and the pace is picking up. Since just last Friday, that’s included one each backed by Bow Capital Management’s Vivek Ranadive, Ron Burkle of Yucaipa Cos., Gores Group founder Alec Gores and telecommunications pioneer Craig McCaw.

A SPAC, in which a pool of capital is raised with the intention to later acquire a business and take it public, is Ackman’s latest push into a private equity-like strategy, diversifying from his activist hedge fund roots.

Pershing Square Capital invested $500 million at $50 a share in developer Howard Hughes Corp. at the beginning of the coronavirus pandemic. It also reported positions in Blackstone Group Inc. and Park Hotels & Resorts Inc. during the first quarter.

Ackman’s record on blank-check companies predates the current wave.

An earlier SPAC backed by Pershing Square, Justice Holdings Ltd., raised $1.44 billion in a 2011 listing in London. Justice Holdings merged with Burger King Worldwide Inc. in 2012 and, in a dealwith 3G Capital Inc., brought the fast-food chain back to the public market. Burger King later merged with Tim Hortons Inc., creating Restaurant Brands International Inc.

‘Mature Unicorns’

Ackman’s new SPAC hasn’t specified which sectors it will focus on. However, the company’s filings have singled out “mature unicorns” as being of particular interest, referring to private companies valued at $1 billion or more.

Pershing Square Tontine also said it would target large IPO candidates, private equity-backed companies in need of capital, private companies worth more than $10 billion and family-owned businesses.

The SPAC had earlier marketed 150 million units, aiming to raise $3 billion. The units include one share and a warrant for one-ninth of a share, plus a warrant that comes with special restrictions.

The offering was led by Citigroup, Jefferies Financial Group Inc. and UBS Group AG. Pershing Square Tontine’s shares are expected to trade under the symbol PSTH.

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