Photo Credit: Bill Ackman by Adam Jeffery for CNBC
Bill Ackman’s Pershing Square USA downscales its IPO valuation to ‘only’ $2 billion, down from an initial $25 billion expectation.
Bill Ackman, Pershing Square Capital Management CEO and billionaire hedge fund manager, is looking to raise $2 billion in the first public phase of Pershing Square USA — a significantly lower IPO valuation than the initial $25 billion clocked by Bloomberg News and The Wall Street Journal.
The initial public offering consists of 40 million shares priced at $50, with its underwriters given the option of purchasing an additional six million shares. Underwriters would include banks like Citigroup, Bank of America, and Jefferies.
The IPO will be in the form of a closed-end fund, with the expectation that it will hold many of the same positions as Ackman’s other ventures. The company also has a closed-end fund in Europe, which trades at a discount to its net asset value.
The move was expected to happen early this week, but has been delayed as of Friday, according to the New York Stock Exchange. Shares are expected to begin trading next Tuesday, August 6.
After several meetings and numerous investor concerns, Ackman reduced his expectation to between $2.5 billion and $4 billion, according to a letter to strategic partners. Pershing Square disclosed this letter in a July 25 filing and then officially disclaimed Ackman’s statements.
Pershing Square Holdings is a major shareholder in Universal Music Group; notably, the two entities’ share price traded alongside one another on the Euronext in Amsterdam. That said, Ackman is known for his ruthless and bullish investment tactics — which may not vibe with the music industry in an unfavorable climate to music acquisitions. Even with a significantly lower valuation, $2 billion is an optimistic ask in the statistically negative trading history of closed-end funds.
Ackman is best known for a disastrous $1 billion gamble against Herbalife, but these days he’s shied away from corporate activism. He can be seen most frequently posting his personal political takes at high volume on the former Twitter, where he has over 1.2 million followers.
