Billionaire Bill Ackman’s pitch to create a new class of SPACs faces hurdles in trying to woo the skeptical SEC, Bloomberg Law reports.
Ackman recently told investors in his $4 billion SPAC, Pershing Square Tontine Holdings, that he’d return their money if the SEC approves a new vehicle he’s dubbed a “SPARC” or special purpose acquisition rights company.
Ackman’s proposal turns the traditional SPAC model on its head. In a SPAC, a sponsor gathers a pot of money through an IPO of a shell company with the intent to acquire a successful private company. He’s proposing to offer investors the right to buy shares in a blank-check company after a target is announced—allowing them to avoid putting in upfront capital. Read more.