Billionaire investor Bill Ackman said he will return US$4bn to investors in what was the biggest-ever special purpose acquisition company (Spac) after it was unable to find a suitable merger.
Backed by Ackman’s Pershing Square hedge fund, Pershing Square Tontine Holdings Ltd (PSTH) floated in the relative Spac heyday of July 24 2020.
Having not completed a deal or being in the process of trying to do so, PSTH said it is now beginning the process of winding up and will redeem cash to investors within 10 days.
Last year the Spac agreed to buy a 10% stake in Universal Music Group (UMG) from Vivendi but US financial regulators blocked the deal.
In his letter to investors in the PSTH last August, Ackman noted the decline of the market value of Spacs in general and PSTH itself “to a level approximating its $20 per share cash in trust”, just below which it has remained until this week.
Net of taxes, the company said it expects the US$20.05 per share to be redeemed and that the shares will cease to trade publicly as of the close of business on July 25, 2022.