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Ackman's Pershing Square Is Said to File for Blank Check IPO

Pershing Square may raise more than $1 billion for a blank check initial public offering, media reports say.
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Pershing Square Capital Management, the investment firm run by hedge-fund icon Bill Ackman, reportedly has quietly filed for an initial public offering of a blank check company.

Pershing Square may raise more than $1 billion for the company, a source told Bloomberg. Reuters first reported the plan for an IPO.

Blank check companies don’t own anything when they go public. They are  special-purpose-acquisition companies, which execute a merger or acquisition within a certain time frame, typically 24 months.

As for Ackman, he said last month that he exited investments in Warren Buffett’s Berkshire Hathaway undefined, Blackstone Group  (BX) - Get Blackstone Inc. Report and Park Hotels & Resorts  (PK) - Get Park Hotels & Resorts, Inc. Report.

Berkshire still represents a solid company, but given the market’s recent volatility, better opportunities may await, Ackman said, according to Bloomberg.

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“The one advantage we have versus Berkshire is relative scale,” he maintained. “Berkshire has the problem of deploying $130 billion worth of capital.”

Pershing manages $10 billion, so it can be more flexible, Ackman said. “We should take advantage of that nimbleness, preserve some extra liquidity, in the event that prices get more attractive again,” he said.

Morningstar analyst Greggory Warren also views Berkshire as a strong company.

“We think Berkshire Hathaway's decentralized business model, broad business diversification, high cash-generation capabilities, and unmatched balance sheet strength provide opportunities for its subsidiaries that might elude other firms and offer potential downside protection in a downturn,” the analyst wrote in an April commentary.

Berkshire Hathaway Class B shares recently traded at $183.48, down 4.2%. They have dropped 9% in the last three months.