Ackman rewrites SPAC’s ‘merger’, de-SPACs heat up

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The PSPC market started the week somewhat sleepy after the Memorial Day holiday, with no deal announcements or IPO pricing until Thursday. In total, the week ended with the announcement of 3 new mergers *, underlined by the massive (and complicated) Pershing Square / Universal Music transaction (see below). 6 new S-1s, including 4 from Chamath, and no new IPO price.

De-SPAC is now the name of the game, as 4 new companies were De-SPAC this week, with two more votes on Friday. June is expected to be a busy month for merger and space withdrawal votes, as there are currently at least 20 SPACs expected to vote on their business combinations the rest of the month.

Overall, SPACs remain on a discounted price, with the average pre-deal SPAC trading at $ 9.82 at a discount – and remains a strong risk-reward game, especially given that De-SPACs trade better. than before.

A glimpse of the week that was, in the PSPCs …

Ackman stuns with PSTH
Bill Ackman stunned the SPAC world on Friday with the proposed deal (under discussion) to buy 10% of Universal Music Group. You can read an overview of the structure of the deal here – but, essentially, the deal will result in 3 separate traded securities for PSTH shareholders:

1. Shares of Universal Music Group, once listed on Euronext
2. Shares in PSTH RemainCo, which will be a pool of around $ 1.5 billion that will function as PSPC (but not technically)
3. Rights to buy shares in a special acquisition rights company, which will have $ 6-10 billion to seek out a target, but will not be limited to a 2-year time frame

Carry
When PSTH went public in July 2020 and raised $ 4 billion in PSPC’s largest IPO ever, it did so with the intention of targeting a “mature unicorn. “There is speculation that PSTH was business targeting like Bloomberg, Stripe or Airbnb … but it didn’t work out. So maybe a $ 4 billion PSPC pool was just too big – there probably weren’t enough (voluntary) targets of a size big enough for $ 4 billion.

So, by using the $ 4 billion to pay 10% of UMG and meeting the initial business combination criteria of the PSPC, PSTH RemainCo can function as a smaller, albeit still large, non-PSPC PSPC at 1. $ 5 billion (say 5 times faster). Add to that that PSTH is raising another SPAC, SPARC, next door – allows PSTH another potential pool of capital for more deals.

Time will tell how the market and shareholders ultimately determine the usefulness of this trade. PSTH closed the day lower -11.94% at $ 22.06, but still above the offer value of $ 20.

Weekly summary of PSPC activity

New PSPC mergers

* note that the PSTH agreement is not yet officially announced, but confirmed under discussion

New PSPC IPOs

Nothing

New PSPC S-1

6 have deposited over $ 1 billion, evidenced by Chamath’s 4 new biotech SPACs with Suvretta.

De-SPAC

4 new companies officially De-SPAC’ed this week, trading under their new tickers. While 2 others, GIX and DFHT, voted today and expect to trade under their new tickers next week.

We’ve seen De-SPACs perform better – and remember that in the long run, they haven’t been as bad as the narrative might suggest.

In fact, if you watch the new one ETF De-SPAC from Tuttle Capital, made up of the 25 largest recent de-spacs, DSPC is up ~ + 16%.

Next week’s votes

June 11 | $ 18.96 | ACTC – ArcLight Clean Transition Corp -> Proterra Inc
June 10 | $ 17.20 | SSPK – Silver Spike Acquisition Corp. -> WM Holding Company, LLC
June 10 | $ 10.08 | CCX – Churchill Capital Corp II -> Software Luxembourg Holding SA
June 10 | $ 10.00 | VGAC – VG Acquisition Corp -> 23andMe, Inc.
June 09 | $ 10.09 | THBR – Thunder Bridge Acquisition II, Ltd -> Independent semiconductor
June 09 | $ 9.99 | CAPA – HighCape Capital Acquisition Corp -> Quantum-Si
June 08 | $ 10.12 | ARYA – Arya Sciences Acquisition Corp III -> Nautilus Biotechnology, Inc.
June 07 | $ 13.81 | FSRV – FinServ Acquisition Corp -> Katapult Inc.

Today’s biggest winners

8.85% ~ $ 14.02 | CLII – Climate Change Crisis Real Impact I Acquisition Corp (Announced)
6.56% ~ $ 14.29 | LACQ – Leisure Acquisition Corp. (Ad)
6.05% ~ $ 14.02 | PSAC – Property Solutions Acquisition Corp (Announced)
6.02% ~ $ 11.09 | PDAC – Peridot Acquisition Corp (Announced)
5.52% ~ $ 17.20 | SSPK – Silver Spike Acquisition Corp. (Ad)
4.80% ~ $ 10.27 | GTPA – Gores Technology Partners, Inc (Pre-agreement)
4.31% ~ $ 23.95 | CCIV – Churchill Capital Corp IV (Announced)
3.50% ~ $ 12.73 | FTIV – FinTech Acquisition Corp. IV (Announced)
3.21% ~ $ 12.47 | CMII – CM Life Sciences II Inc. (Announced)
2.67% ~ $ 15.02 | RSVA – Rodgers Silicon Valley Acquisition Corp (Announced)
2.52% ~ $ 10.57 | BTWN – Bridgetown Holdings Ltd (Pre-agreement)
2.37% ~ $ 10.38 | GSAH – GS Acquisition Holdings Corp II (Pre-Deal)
2.31% ~ $ 11.98 | CMLF – CM Life Sciences Inc (Announced)
2.21% ~ $ 18.96 | ACTC – ArcLight Clean Transition Corp (Announced)
2.13% ~ $ 10.30 | CMLT – CM Life Sciences III Inc. (Pre-Deal)
1.99% ~ $ 10.00 | NGC – Northern Genesis Acquisition Corp. III (Pre-agreement)
1.85% ~ $ 10.48 | RACA – Therapeutics Acquisition Corp (Announced)

Today’s Biggest Losers

-11.94% ~ $ 22.06 | PSTH – Pershing Square Tontine Holdings (Announced)
-3.84% ~ $ 11.27 | SRAC – Stable Road Acquisition Corp. (Ad)
-3.33% ~ $ 13.05 | TPGY – TPG Pace Beneficial Finance Corp (Announced)
-3.30% ~ $ 9.67 | FRWA – PWP Forward Acquisition Corp. I (Pre-Deal)
-2.82% ~ $ 10.00 | RACB – Research Alliance Corp. II (Pre-agreement)
-1.49% ~ $ 9.26 | GIX – GigCapital2, Inc. (Announced)
-1.45% ~ $ 10.20 | ARYD – ARYA Sciences Acquisition Corp IV (Pre-Deal)
-1.44% ~ $ 10.28 | AGCB – Altimeter Growth Corp. 2 (Pre-Deal)
-1.42% ~ $ 13.21 | JIH – Juniper Industrial Holdings, Inc. (Announced)
-1.38% ~ $ 10.00 | PACE – TPG Pace Tech Opportunities Corp (Announced)
-1.32% ~ $ 14.92 | DFHT – Deerfield Healthcare Technology Acquisitions Corp. (Ad)
-1.28% ~ $ 9.99 | CAPA – HighCape Capital Acquisition Corp (Announced)
-1.25% ~ $ 12.63 | FST – FAST ACQ CP (Announced)
-1.23% ~ $ 9.67 | NAAC – North Atlantic Acquisition Corporation (Pre-Deal)
-1.22% ~ $ 9.73 | SSAA – Science Strategic Acquisition Corp. Alpha (Pre-Deal)
-1.17% ~ $ 10.14 | FTOC – FTAC Olympus Acquisition Corp (Announced)
-1.12% ~ $ 9.75 | SPKB – Silver Spike Acquisition Corp II (Pre-Agreement)
-1.04% ~ $ 9.63 | BIKE – Velocity Acquisition Corp (Pre-Deal)
-1.02% ~ $ 9.67 | PPGH – Poema Global Holdings Corp. (Pre-Deal)

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(Disclaimers: This is not investment advice. The author can go on and on about one or more of the actions mentioned in this report.)