Billionaire investor Bill Ackman in an interview with Bloomberg Thursday admitted he held early discussions with both Airbnb Inc and Stripe Inc on merger with his blank check company Pershing Square Tontine (NYSE: PSTH-U).
What Happened: Ackman said discussions were held with the financial services and software as a service company Stripe, which he said is still not mature enough to go public.
The investor claimed that companies like Stripe and Airbnb stand to benefit by merging with a special purpose acquisition company as it brings certainty on valuation, particularly in times of great volatility.
The hedge fund manager told he is comfortable in completing an agreement within three-to-four weeks and taking the company public 60 days later — provided he gets access to the company’s data room for due diligence and a chance to communicate with the company’s management, even if just virtually.
Companies have many misconceptions about SPACs, according to Ackman. “In our case, you don’t give up anything by doing a deal with us, and you get to figure out everything up front before you sign the papers,” he said.
Why It Matters: According to a Bloomberg report Wednesday, Airbnb had rebuffed Ackman’s offer to go public by merging with Pershing Square. The billionaire now told the publication that he had “get-to-know-you” discussions with Airbnb's management but talks didn't reach the point of due diligence.
Ackman’s SPAC is capital rich with $5 billion in its kitty, including $1 billion committed by Pershing Square Capital Management, LP.
Airbnb filed for an initial public offering last month.The vacation home rental company has not ruled out a merger with Pershing but it prefers a traditional IPO, Ackman said, as per Bloomberg.
Price Action: Pershing square shares closed 0.55% lower at $21.75 on Thursday and gained 0.46% in the after-hours session.