Bill Ackman, CEO of Pershing Square Capital Management, speaks at the Delivering Alpha conference in NYC on September 28, 2023.
Adam Jeffery | CNBC
Billionaire investor Bill Ackman said Friday that U.S. regulators have approved the structure of his unique special purpose acquisition vehicle and he is ready to start looking for a deal.
Investors in Ackman’s failed SPAC, known as Pershing Square Tontine Holdings, were given a tradable right to participate in a future deal, and now it’s closer to reality. The Securities and Exchange Commission gave the green light to what Pershing Square’s CEO has dubbed a SPARC — a special purpose acquisition company — in which he will inform investors about the potential acquisition before they pledge funds.
“If your large private growth company wants to go public without the risks and costs of a typical IPO with Pershing Square as your anchor shareholder, please give me a call,” Ackman said in a post on X, formerly known as Twitter. “We promise a quick yes or no.”
Many have said that the traditional SPAC structure can be inefficient and costly for shareholders. SPACs are publicly traded shell companies that aim to acquire a private company and take it public, usually within two years. With Ackman’s SPARC, investors have the option to agree if they like the deal and walk away if they don’t.
SPARC will soon distribute dedicated purchase rights free of charge to former Pershing Square Tontine security holders. Ackman had raised $4 billion in the largest SPAC ever, but returned the sum to investors after failing to find a suitable target company for the IPO.
After a hot stretch of the pandemic, SPAC investors have turned their backs on speculative growth stocks with unproven track records after many of these companies failed to meet stretched forecasts. As interest rates stabilize, the market and IPOs are showing signs of recovery.
Pershing Square said SPARC will immediately seek mergers with private, high-quality growth companies. It is aimed at companies looking to raise at least $1.5 billion in capital, the company said.
Ackman’s Pershing Square funds could invest at least $250 million and up to $3.5 billion as anchor investors in the potential deal, the company said.