As reported here in Bloomberg, after launching a record-size $4 billion SPAC last summer, Bill Ackman’s Pershing Square Tontine Holdings is unwinding and returning its invested funds back to shareholders.
In June, Pershing Square announced it was buying a 10% stake in Universal Music Group, surprising investors who had been expecting a classic SPAC merger. After litigation was filed alleging that the SPAC was acting (improperly) as an investment company instead of an operating company, Ackman denied the merits of the lawsuit but also reversed course and aborted pursuit of the Universal Music stake.
In response to this controversy, Ackman has also announced that he is pursuing SEC approval for a new type of blank-check company, one that may have been better suited to take on the Universal Music investment: Ackman is contemplating the creation of a SPARC – a special purpose acquisition rights company – that would only take investor money after finding a deal. If approved, existing Pershing Square shareholders may be given the option to participate in a SPARC down the road, in a vehicle under less pressure to identify an acquisition within the customary two-year period facing SPACs.