Banking, finance, and taxes

Pershing Square Tontine Finally Comes Public

Chris Lange

Published: July 22, 2020 11:00 am

Pershing Square Tontine Holdings Ltd. (NYSE: PSTH) entered the market on Tuesday above its original pricing. This is yet another special purpose acquisition company (SPAC) going public. Other recent ones of note have been Landcadia and Nikola.

According to the filing, 200 million units were being offered at $20 apiece, implying a total value of $4 billion for the entire offering. Each unit consists of one share of Class A common stock and one-ninth of a warrant.

The underwriters for the offering are Citigroup, Jefferies, UBS Investment Bank, CastleOak Securities, Loop Capital Markets, Ramirez, Siebert Williams Shank, Academy Securities, C.L. King and Roberts & Ryan.

This is a newly organized blank check company incorporated in Delaware and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

For those late to the party, this company basically will act as a subsidiary to Bill Ackman’s Pershing Square Capital Management (PSCM), which is more or less acting as the sponsor. PSCM had approximately $10.7 billion in assets under management and $9.3 billion of net assets under management as of June 9, 2020.

Obviously, the management team will be led by Ackman, who will work closely with the PSCM investment team and Pershing Square in general to pursue its goal as a blank check company.

As for the goal, the company intends to pursue merger opportunities with private, large capitalization, high-quality growth companies where its ownership in the merged company would generally represent a minority of shares outstanding at the time of the merger.

Pershing Square Tontine stock was up about 7% to $21.42 on Wednesday, in a range of $20.76 to $21.66 on the day thus far. Also as of 11 a.m. Eastern, about 25 million shares had moved.