Pershing Square Tontine Holdings is recalibrating in several ways as Bill Ackman seals a deal for a 10 percent stake in Universal Music Group. In this article Bloomberg breaks down the difference between a SPAC and a SPARC, which Ackman is creating from what remains of his Pershing Square SPAC after the Universal deal. A SPARC is a SPAC without a pool of money. A SPARC investor has a right to buy a share at such time as the SPARC signs a merger partner. Unlike SPACs, a SPARC has no deadline to do a deal.
If Ackman’s hedge fund finds a deal, he can go to his SPARC rights holders and ask if they want to put in $20 for a share of the merged company.
As Bloomberg notes, with a SPARC there are no warrants, no cash value, no shareholder votes and no time limits. Read more.
