Hedge-fund investor William Ackman's Pershing Square Tontine Holdings, a blank-check company, has increased the size of its planned initial public offering to $4 billion from $3 billion.
The company announced the move in a regulatory filing Monday. It revealed the $3 billion figure last month.
Special purpose acquisition companies are formed to make acquisitions with their IPO money, typically within two years. IPO investors are not notified in advance which company a SPAC will buy. Ackman hasn’t indicated what he wants to buy.
But the company’s filings have cited “mature unicorns,” which are big companies with substantial sales that are backed by venture capital firms.
Pershing Square seeks large companies with the ability to offer IPOs, private equity-backed companies that require capital, private companies worth more than $10 billion and family-owned businesses, according to Bloomberg.
Ackman’s SPAC may ultimately raise as much as $7 billion, including contributions of $1 billion to $3 billion from Pershing Square-associate funds.
Even at the earlier price of $3 billion, the IPO would be the largest for a SPAC ever, TheStreet reported last month.
"We intend to pursue merger opportunities with private, large capitalization, high-quality, growth companies where our ownership in the merged company would generally represent a minority of shares outstanding at the time of the merger," Pershing’s June filing said.
"The recent dislocations in both the stock market and private growth equity markets, combined with a number of high-profile private investment failures and disappointing IPO outcomes, have substantially reduced the amount of private funding available for these companies, while demands for liquidity from their investors have increased.”