Pershing Square Tontine Holdings, a blank check company formed by Bill Ackman of Pershing Square targeting "Mature Unicorns," raised $4.0 billion by offering 200 million units at $20.
Each unit consists of one share of common stock and one-ninth of a redeemable warrant, exercisable at $23; common shares also have a right to receive at least two-ninths of a warrant provided that they are not redeemed in connection with a proposed business combination. At pricing, Pershing Square Tontine Holdings commands a market value of $4.0 billion, as the structure does not have the typical 20% founder shares ("sponsor promote"). This deal does not have an underwriter over-allotment.
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Pershing Square Funds has committed to a forward purchase agreement in which it will buy $1.0 billion worth of units at $20 per unit upon the closing of an acquisition; these units will consist of one share of common stock and one-third of a warrant. Pershing Square may elect to purchase an additional $2.0 billion worth of units under the same terms.
As a result of the IPO and committed purchase agreement, the SPAC expects to have a minimum of up to about $5.0 billion in equity capital, subject to standard share redemptions, and as much as $7.0 billion, which includes the additional $2.0 billion in forward purchase units from Pershing Square Funds. Directors may invest an additional $6.0 million in forward purchase units. With the proceeds, the SPAC plans to target a business with a market cap of $10 billion or more.
Pershing Square Tontine will primarily target high-quality IPO candidates with a proven track record of growth and free cash flow, formidable barriers to entry, a capital-light model, limited exposure to macroeconomic factors, a strong balance sheet, a large enough capitalization to be included in the S&P 500, with a competent management team, at an attractive valuation. Some of the largest "Mature Unicorns" on our Private Company Watchlist (IPO Intelligence only) include Stripe, Airbnb, SpaceX, Waymo, and Palantir. However, the SPAC also notes that the impact of COVID-19 may produce other attractive targets, including large, high-quality family-owned businesses and PE portfolio companies; these may include some of the US's largest private companies such as Mars, McKinsey, Bloomberg, or Georgia-Pacific.
Pershing Square Tontine Holdings is led by CEO and Chairman William Ackman, the founder and CEO of Pershing Square Capital Management, and CFO Ben Hakim, who currently serves as a Partner at Pershing Square. Independent directors are Lisa Gersh, co-founder of Oxygen Media and former CEO of Alexander Wang, Goop, and Martha Stewart; Michael Ovitz, co-founder of Creative Artists Agency (CAA), Broad Beach Ventures, and senior advisor to Palantir Technologies; Jacqueline Reses, head of Square Capital and formerly the CDO of Yahoo! and the head of the US media group of Apax Partners; and Joseph Steinberg, Chairman of Jefferies Financial Group.
Pershing Square Tontine Holdings plans to list on the NYSE under the symbol PSTHU. Citi, Jefferies and UBS Investment Bank acted as joint book-running managers on the deal. CastleOak Securities, Loop Capital Markets, Ramirez & Co., and Siebert Williams Shank acted as co-lead managers
