Bill Ackman winds down $4bn Spac after failing to find a target

Bill Ackman returns to investors the $ 4 billion he raised for his record-breaking specialty acquisition company, in a blow to the billionaire hedge fund manager.

In a letter to shareholders of Pershing Square Tontine Holdings on Monday, Ackman said the rapid economic recovery from the corona plague has affected his ability to find a target.

“We launched PSTH in the depths of the epidemic because we believed that the capital markets would likely be affected by the economic uncertainty created by the epidemic,” he wrote.

“The rapid recovery of our capital and economy markets has been good for America but unfortunate for PSTH, as it has made the conventional IPO market a strong competitor and a preferred alternative for quality businesses seeking to go public,” he added.

Ackman registered his check company in July 2020, just as the momentum began to take off. The decision to cancel it comes a few weeks before a deadline of two years to find a destination.

Gains Raise money on the stock market and use the profits to look for a private company for the public. Because empty check companies are inactive, investors usually look at the quality of the supporters to decide whether to invest – Wackman, one of Wall Street’s best-known investors, helped add credibility to the emerging market.

Ackman Tried to reinvent the Spac by creating a structure that eliminated some of the benefits to the founders, which were increasingly tested.

However, his greatest attempt to rewrite the rules was a A complex and innovative transaction With Universal Music Group in which he sought to acquire 10 percent of the shares using the money raised through the Spac without bringing the company to the public.

Ackman was forced to abandon the deal following a reaction against regulators and chose to buy the $ 4 billion stake in Universal Music using money from his hedge fund, Pershing Square, instead.

Later, Robert Jackson, a former U.S. Securities and Exchange Commissioner, and John Morley, a professor at Yale Law School, filed a lawsuit on behalf of a PSTH shareholder alleging that Ackman’s Spac operated as an “illegal investment firm.” .

Ackman said the lawsuit was baseless and hurt his chances of reaching a deal within the required time frame.

Added to the challenge a tough environment for Spacs, which went largely out of the minds of mature investors and companies low performance.

Ackman said he remains optimistic, however, and stated in his letter that he is still working on launching a Sparc – Shortening of a purchase company for special purposes, which gives investors the option but not the obligation to participate in the transaction.

“When the Spac and IPO markets are virtually closed today, it is now a highly opportunistic investment environment for public procurement tools that does not suffer from Spacs’ negative reputation,” he wrote.

Bill Ackman winds down $4bn Spac after failing to find a target Source link Bill Ackman winds down $4bn Spac after failing to find a target

Related Articles

Back to top button