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The biggest SPAC ever just got bigger: Pershing Square Tontine Holdings ups unit offering ahead of $4 billion IPO

July 13, 2020

Pershing Square Tontine Holdings, a blank check company formed by Bill Ackman of Pershing Square targeting "Mature Unicorns", raised the proposed deal size for its upcoming IPO on Monday. In its latest filing, the company also removed the underwriters' overallotment option and disclosed a $6.0 million forward purchase agreement with its directors.

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The New York, NY-based company now plans to raise $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 two-ninths of a warrant provided that they are not redeemed in connection with a proposed business combination. The company had previously filed to offer 150 million units at the same price. At the revised deal size, Pershing Square Tontine Holdings will raise 33% more in proceeds than previously anticipated to command a market value of $4.0 billion, as the structure does not have the typical 20% founder shares ("sponsor promote").

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 and excludes the $6.0 million in forward purchase units from its directors. With the proceeds, the SPAC plans to target a business with a market cap of $10 billion or more.

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 was founded in 2020 and plans to list on the NYSE under the symbol PSTH.U. Citi, Jefferies, and UBS Investment Bank are the joint bookrunners on the deal.

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