Bill Ackman’s Pershing Square SPARC Holdings filed with the SEC to offer more than 244 million subscription warrants to purchase stock at a minimum price of $10 per share. The “SPARC” plans to list on the NYSE, but has not yet selected ticker symbols for shares and rights.
The hedge fund billionaire refers to these subscription warrants as SPARs, or special purpose acquisition rights. Ackman’s company is distributing the SPARs to holders of Class A stock and redeemable warrants of Pershing Square Tontine Holdings.
A SPARC is similar to a SPAC, but 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 finds a merger target he likes, he can go to his SPARC rights holders and ask if they want to put in for shares of the merged company.
Meanwhile, the listing and trading of SPARs will require the SEC to approve a new listing rule submitted by the NYSE permitting the listing and trading of subscription warrants by acquisition companies. Read more.
