Bill Ackman's SPARC vehicle receives regulatory approval

investmentweek.co.uk:

Ackman’s firm, Pershing Square Capital Management, said the SPARC will target companies seeking to raise at least $1.5bn.

The structure was approved by the Securities and Exchange Commission on Friday (29 September) and is intended to be the successor to Ackman's US-listed SPAC Pershing Square Tontine, which was wound up last year and returned £4bn to shareholders.

According to a statement by Ackman's firm, Pershing Square Capital Management, the SPARC will immediately begin to pursue business combination opportunities with «private, high-quality, growth companies».

This will also include carve-out transactions with large capitalisation public or private companies. The vehicle will be targeting companies seeking to raise at least $1.5bn.

Bill Ackman's Pershing Square Holdings trust eyes $100m share buyback

Affiliates of Pershing Square Capital Management, including PSH, will commit a minimum of $250m and up to $3.5bn as anchor investors in the SPARC transaction.

Under the terms of a SPAC, investors are required to put in money upfront and wait up to two years to find out which company the SPAC will merge with. Under a SPARC structure, however, investors buy into the company after a purchase target is identified and the amount of capital it aims to raise has been determined.

Shareholders of Ackman's former SPAC, Pershing Square Tontine Holdings, will shortly receive a number of short-term options, or SPARs, that entitle them to invest in the SPARC's next transaction at net asset value when it is announced.

Once the SPARC's shares are eligible to trade, these will be available for trading for 20 business days, at which time they can be exercised or expire, if investors choose not to take the deal.

Pershing Square