Nightcap: Pershing Square Tontine's Universal Deal Loses its "SPARC"

SPAC Track's Nightly Newsletter

Nightly recap of the day’s SPAC highlights (July 19, 2021)

The Stats:

 


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The Deals (4):

1) Investindustrial Acquisition Corp. (IIAC: $9.84) & Ermenegildo Zegna Group

Ermenegildo Zegna Group, a Leading Global Luxury Group, to Become a Publicly Traded Company Listed on NYSE by Combining With Investindustrial Acquisition Corp. (Press Release)

  • Merger Partner Description:

Rooted in the future, the Ermenegildo Zegna Group is a leading global luxury group, internationally recognised for the excellent quality and designs of its brands Zegna and Thom Browne and the noble fabrics and fibres by means of the in-house entirely Made in Italy Luxury Textile and Manufacturing Laboratory Platform.

  • Valuation: $3.17B Pro-forma EV
  • PIPE: $250M

2) Omnichannel Acquisition Corp. (OCA: $9.85) & Kin Insurance

Kin, the Only Pure-Play Direct-to-Consumer Home Insurance Technology Company, to Go Public (Press Release)

  • Merger Partner Description:

Kin is the home insurance company For Every New Normal. By leveraging proprietary technology, Kin delivers fully digital homeowners insurance with an elegant user experience, accurate pricing and fast, high-quality claims service. Kin offers homeowners, landlord, condo, and mobile home insurance through the Kin Interinsurance Network (KIN), a reciprocal exchange owned by its customers who share in the underwriting profit. Because of its efficient technology and direct-to-consumer model, Kin provides affordable pricing and peer leading customer reviews without compromising coverage.

  • Valuation: $1.03B Pro-forma EV
  • PIPE: $80M PIPE led by HSCM Bermuda and Senator Investment Group

3) Capstar Special Purpose Acquisition Corp. (CPSR: $9.85) & Gelesis

PureTech Founded Entity Gelesis, the Maker of Plenity®, to Become a Publicly Traded Company via Merger with Capstar Special Purpose Acquisition Corp. (Press Release)

  • Merger Partner Description:

Gelesis is a consumer-centered biotherapeutics company advancing a novel category of treatments for weight management and gut related chronic diseases. Our non-systemic superabsorbent hydrogels are inspired by the composition (i.e., water & cellulose) and mechanical properties (e.g., elasticity or firmness) of raw vegetables. They are conveniently administered in capsules to create a much larger volume of small, non-aggregating hydrogel pieces that become an integrated part of the meals, and act locally in the digestive system. Our portfolio includes Plenity®, an FDA-cleared product to aid in weight management, as well as potential therapies in development for Type 2 Diabetes, Non-alcoholic Fatty Liver Disease (NAFLD)/Non-alcoholic Steatohepatitis (NASH), and Functional Constipation.

  • Valuation: $1.33B Pro-forma EV
  • PIPE: $100M including PIMCO private funds, Kennedy Lewis Investment Management, Pritzker Vlock Family Office, China Medical Systems Holdings Limited (CMS), and co-founder PureTech Health

4) ECP Environmental Growth Opportunities Corp. (ENNV: $9.81) & Fast Radius

Fast Radius, a First-of-its-Kind Cloud Manufacturing and Digital Supply Chain Company, to List on NASDAQ through a Business Combination with ECP Environmental Growth Opportunities Corp. (Press Release)

  • Merger Partner Description:

Fast Radius, Inc. is a leading cloud manufacturing and digital supply chain company.  The Cloud Manufacturing Platform™ from Fast Radius is a first-of-its-kind solution that integrates design, production, and fulfillment operations through a common digital infrastructure to make manufacturing easier, more accessible, and more sustainable.

  • Valuation: $995M Pro-forma EV
  • PIPE: $100M including a $25M forward purchase commitment from certain accounts managed by Goldman Sachs Asset Management, L.P. Other investors in the PIPE include UPS, Palantir, and ECP

 

Deal News:

 

Pershing Square Tontine Holdings, Ltd. (PSTH: $20.39terminates its transaction with Universal Music Group (letter to shareholders)

 

Yesterday, our board of directors unanimously determined not to proceed with the Universal Music Group transaction, and to assign our share purchase agreement to Pershing Square Holdings, Ltd.. Pershing Square has also agreed to assume the Vivendi indemnity agreement and our UMG transaction costs.

In light of these developments, PSTH is withdrawing its Redemption Tender Offer and related Warrant Exchange Offer.

Our decision to seek an alternative initial business combination was driven by issues raised by the SEC with several elements of the proposed transaction – in particular, whether the structure of our IBC qualified under the NYSE rules.

We and our counsel had multiple discussions with the SEC attempting to change its position on the issues that it had identified. Ultimately, our board concluded that it was in the best interest of shareholders to assign the UMG stock purchase agreement to Pershing Square (which is specifically permitted under the terms of the agreement with Vivendi) as it did not believe PSTH would be able to consummate the transaction in light of the SEC’s position. Management and the board believe that greater shareholder value can be created by working expeditiously to identify a new merger partner.

PSTH has 18 months remaining to close a new transaction unless extended by the vote of our shareholders. In light of our recent experience, our next business combination will be structured as a conventional SPAC merger.

While we are disappointed with this outcome, we continue to believe that the unique scale and favorable structure of PSTH will enable us to find a transaction that meets our standards for business quality, durable growth, and a fair price. We are highly economically and reputationally motivated to consummate a successful transaction. We will, however, only complete a deal that meets our high standards.

Our share price has fallen by 18% since the transaction was announced on June 4th. While we believe our shareholders recognize UMG’s extraordinary attributes including its attractive growth characteristics, business quality, and superb management team, we underestimated the reaction that some of our shareholders would have to the transaction’s complexity and structure. We also underestimated the transaction’s potential impact on investors who are unable to hold foreign securities, who margin their shares, or who own call options on our stock.

While management and the board clearly understood that the intricacies of our transaction structure could affect its attractiveness in the short term, we believed that substantial shareholder value would have emerged over the intermediate to long term from the sum of the parts that were created in the transaction, namely: (1) UMG, (2) PSTH RemainCo, and (3) warrants on Pershing Square SPARC Holdings, Ltd. Furthermore, we expected that the transaction’s structural issues would largely be resolved by the end of this year.

While PSTH shareholders will not receive UMG stock, UMG will become a public company when it is listed on Euronext Amsterdam in September.

 

 

PropertyGuru Near $1.8 Billion Merger With Peter Thiel SPAC

Singapore’s online real estate firm PropertyGuru Pte is nearing a deal to go public through a merger with Bridgetown 2 Holdings Ltd. (BTNB: $10.00), the blank-check company backed by billionaires Richard Li and Peter Thiel, according to people with knowledge of the matter.

A transaction could value the combined entity at about $1.8 billion, the people said, asking not to be identified because the matter is private. The deal will also include a private investment in public entity, or PIPE, of about $100 million to $150 million, anchored by institutional investors including Australia’s REA Group Ltd., the people said.

The parties are hammering out the final details and an announcement could come as early as this week, the people said. Discussions could still face delays or even fall apart, they added. Representatives for PropertyGuru and Bridgetown 2 declined to comment, while a representative for REA Group didn’t immediately respond to requests for comment.


 

Quick News Corner:

  • Evolv Technology (EVLV: $10.40completes its merger with NewHold Investment Corp (NHIC). Started trading as EVLV today.

  • Andina Acquisition Corp III (ANDA: $8.90) shareholders approve the merger with Stryve


 

New S-1s (4)

1) Kensington Capital Acquisition Corp. V (KCGI)

  • $260M, 1/5 warrant

  • Focus: North American and European Industrials

  • Management:

    Justin Mirro (Director of QuantumScape)

  • S-1 Link

2) Oxbridge Acquisition Corp. (OXAC)

  • $100M, 1 Warrant

  • Focus: Disruptive Tech: InsurTech, blockchain, and artificial intelligence

  • S-1 Link

3) Seaport Calibre Materials Acquisition Corp. (SCMA)

  • $150M, 1/2 warrant

  • Focus: Steel, metals, and metal processing

  • S-1 Link

4) Aesther Healthcare Acquisition Corp. (Ticker not available yet)

  • $100M, 1/2 warrant

  • Focus: Pharmaceuticals

  • Management:

    Suren Ajjarapu (Chairman & CEO of TRxADE Health)

  • S-1 Link


 

Upcoming Dates:

This Week’s Announced Shareholder Meetings, Unit Splits, Warrant Redemptions

Tuesday, July 20th

  • Merger Meetings:

    Gores Holdings VI, Inc. (GHVI: $13.25) & Matterport

    Tailwind Acquisition Corp. (TWND: $8.70) & QOMPLX

    Ascendant Digital Acquisition (ACND: $8.79) & MarketWise

    Property Solutions Acquisition (PSAC: $13.62) & Faraday Future

    Revolution Acceleration Acquisition Corp (RAAC: $8.66) & Berkshire Grey

Wednesday, July 21st

  • Merger Meetings:

    Tuscan Holdings Corp (THCB: $11.38) &Microvast

    CM Life Sciences, Inc. (CMLF: $11.94) & Sema4

    10X Capital Venture Acquisition Corp (VCVC: $9.90) & REE Automotive

Thursday, July 22nd

  • Merger Meeting: Churchill Capital Corp IV (CCIV: $22.20) & Lucid Motors

  • Unit Split: Lakeshore Acquisition I Corp. (LAAA-U: $10.22)


Thanks for reading,

SPAC Track

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