“There’s literally no compensation to the sponsor,” Bill Ackman says about Pershing Square Tontine Holdings, which will be the largest SPAC to date.
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Bill Ackman's Pershing Square Tontine Holdings is poised to become the largest special purpose acquisition company, or SPAC, on record when it begins trading on Wednesday. The fund, announced in June, targeted $4 billion in outside capital, which was higher than the initial target of $3 billion. Ackman's hedge fund, Pershing Square Capital, will invest an additional $1 billion to $3 billion, meaning the vehicle's total value could reach $7 billion.Ackman said Wednesday on CNBC's"What's new in our structure is that we're taking no compensation: no management fees, incentive fees ... we're not buying cheap stock.
SPACs are also known as blank-check companies, since investors fork over money without knowing when, or even what for, their capital will be used. Once the SPAC goes public, the goal is then for it to acquire or merge with a private company, thereby taking it public. Investors then have the option to become shareholders in the newly combined company.
For the private company, it's a less risky way to go public on an often accelerated timeline, and without having to jump through all of the SEC's regulatory hoops.for exclusive insights and analysis, and live business day programming from around the world.
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