June 22, 2020 / 5:30 PM / 13 days ago

Bill Ackman's new acquisition company files for IPO of up to $3 bln

NEW YORK/BOSTON, June 22 (Reuters) - Billionaire investor William Ackman, whose hedge fund is delivering some of the year’s best returns, said on Monday he was looking to raise $3 billion and commit at least $1 billion for a new blank-check investment vehicle, the largest ever of its kind.

The initial public offering of the special purpose acquisition company (SPAC), Pershing Square Tontine Holdings, Ltd, plans to offer 150 million units at $20 each, according to a Securities and Exchange Commission filing.

Ackman’s funds are adding $1 billion, which would leave the vehicle with at least $4 billion, the filing said. Pershing Square has the option to add more, for a total of up to $6.45 billion, the filing said.

Reuters first reported Ackman’s plans for the vehicle earlier this month.

A SPAC uses IPO proceeds and borrowed funds to acquire a company, typically within two years. IPO investors are not notified in advance which company a SPAC will buy.

Ackman’s new vehicle will handily beat out former Citigroup Inc executive Michael Klein’s Churchill Capital Corp, which raised $1.1 billion, as the largest U.S. SPAC IPO ever.

Ackman, who runs $10 billion Pershing Square Capital Management, returned to the market from a position of strength with his fund having gained roughly 30% since January.

SPACs have raised $10.4 billion through U.S. IPOs so far in 2020, according to SPAC Research, on track to exceed the record $13.6 billion in all of 2019.

Ackman prefers to invest in what he calls “simple, predictable, free cash flow generative businesses,” and counts restaurant chain Chipotle Mexican Grill Inc as one of his biggest holdings.

Reporting by Svea Herbst-Bayliss; Editing by Richard Chang

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