By C Nivedita and Joshua Franklin
The company sold 200 million units at $ 20 each in the IPO, and they opened at $ 21.10 on the New York Stock Exchange, a bigger commercial pop the first day than typical for a SPAC listing.
“We believe that we can reach an advantageous agreement for our shareholders, really providing a great opportunity for a company to accelerate its growth, eliminate the balance sheet and provide capital to investors seeking to exit,” Ackman told CNBC Wednesday.
Ackman has said he was looking to buy a “mature unicorn,” which has chosen to remain private due to limited investor pressure on liquidity so far.
In addition to the money raised on the IPO, the SPAC also entered into a forward purchase agreement with Ackman’s Pershing Square Funds for a minimum of $ 1 billion units, each comprising a Class A share and a third of a redeemable warrant, priced at $ 20 per unit.
The forward buyer, which includes three funds owned by Pershing Square Capital Management, is entitled to purchase up to $ 2 billion in additional units.
The money raised for a SPAC is deposited in an interest-bearing trust until the SPAC manager identifies a company to buy. A SPAC generally acquires within two years of the IPO and investors are not notified in advance of the target.
Blank check companies have raised $ 16.2 billion through the US IPO so far in 2020, according to SPAC Research, easily breaking the record of $ 13.6 billion in 2019.
