Ackman received a green light from the United States SEC with an intent to invest a minimum of $1.5 billion in private companies seeking to go public without following the traditional IPO route.
Billionaire Bill Ackman, the Chief Executive Officer for Pershing Square, announced that his newly approved SPARC funding vehicle would absolutely consider a deal with the Elon Musk-backed X platform. According to a post by the WSJ, Ackman highlighted that he would be interested in a deal despite Musk’s intention to retain the X platform privately held to steer forward the agenda of developing a global integrated financial hub.
Notably, Ackman’s Pershing Square SPARC Holdings Ltd received regulatory approval from the United States Securities and Exchange Commission (SEC) last Friday. According to the announcement the funding vehicle intends to distribute its special purpose acquisition rights (SPARs) at no cost to former security holders of Pershing Square Tontine Holdings Ltd. (PSTH). Moreover, the funding vehicle intends to only raise money after a deal has been reached with a prospective private company with a high potential for future growth prospects.
Pershing Square SPARC Holdings highlighted that it will back private companies seeking to raise a minimum of $1.5 billion. As a result, Ackman thinks a deal with Musk’s X platform is viable since the social media behemoth has an outstanding loan of about $12.5 billion to a group of seven banks.
“SPARC will immediately begin to pursue business combination opportunities with private, high-quality, growth companies including carve-out transactions with large capitalization public or private companies,” the company noted.
Pershing Square and the Market Outlook
In an announcement through the X platform, Ackman noted that Pershing Square intends to reduce the hustle for large private companies that seek to go public. Moreover, Pershing Square will act as the anchor shareholder thus eliminating the cost of typical Initial Public Offerings (IPO). Additionally, traditional IPOs have the risk of not meeting the initial expectations.
Pershing Square SPARC Holdings, Ltd.
If your large private growth company wants to go public without the risks and expenses of a typical IPO, with Pershing Square as your anchor shareholder, please call me. We promise a quick yes or no. https://t.co/6YXVZm9EgQ
— Bill Ackman (@BillAckman) September 29, 2023
Essentially, a deal with the Musk-banked X platform could return the company to the hands of the public. However, such a deal is less unlikely at the moment as Musk is in the process of transforming the platform into a global financial ecosystem. Nonetheless, some of the banks that financed the X platform acquisition could consider Ackman’s deal as the platform is not expected to be profitable for another.
“Unlike a conventional IPO – whereby the pricing, the ultimate terms of the offering, and even whether or not the offering can be completed remains unknown until the day of the pricing of the offering – a transaction with SPARC will enable a private company to raise a minimum amount of capital at a negotiated fixed price,” the company noted.