Billionaire investor Bill Ackman offers new hints on possible targets for his record-breaking SPAC

Billionaire investor Bill Ackman offers new hints on possible targets for his record-breaking SPAC

October 9, 2020

REUTERS/Brendan McDermid

  • Pershing Square Tontine is looking at employee-owned and family-controlled businesses as potential targets for a merger, Bill Ackman said in an interview with investor Whitney Tilson.
  • The billionaire investor previously indicated his special-purpose acquisition company, or SPAC, was eyeing “mature unicorns” and “high-quality, venture-backed businesses” as takeover targets.
  • Ackman added that he limited the size of his blank-check firm to avoid shrinking the pool of merger candidates.
  • The SPAC aims to take a minority stake in a company worth between $10 billion to $15 billion, the billionaire investor said.
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Billionaire hedge fund manager Bill Ackman gave new hints at which companies he may target with his record-breaking blank-check firm.

Pershing Square Tontine Holdings is looking at employee-owned and family-controlled businesses for a potential merger, Ackman told investor Whitney Tilson in an interview, according to Bloomberg. Ackman previously indicated his special-purpose acquisition company was eyeing “mature unicorns” and “high-quality, venture-backed businesses.”

The Pershing Square Capital founder also said he limited his SPAC’s size to more effectively take a minority stake in a large firm. Raising too much cash with the vehicle would shrink the pool of potential acquisition targets. Seeking a minority stake might also yield Ackman a better price, he said.

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“If you’re selling 100% of your company, you want the last dollar,” Ackman said. “If you’re selling 20% of your company in a merger which enables you to take your company public but you keep control, you’re much less price-sensitive.”

Ackman added he’s looking at companies within the $10 billion to $15 billion window. Bloomberg reported in early September that the billionaire investor aimed to merge with Airbnb, but the home-rental company declined the offer in early-stage talks. Airbnb now plans to hold an initial public offering in December.

Pershing Square Tontine made waves in the rapidly growing SPAC space with its July debut. The firm raised $4 billion with its IPO, a record for such investment vehicles and a new sign of Wall Street’s obsession with SPACs.

More than $53 billion has been raised across 138 SPAC IPOs this year so far, according to SPACInsider.com. Last year saw only $13.6 billion raised across 59 deals. The average size of SPAC IPOs climbed to $388 million this year from $230 million in 2019.

Pershing Square Tontine closed at $22.50 on Thursday, up from its offering price of $20.

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