PSTH - Bill Ackman to wind down SPAC return $4 billion to investors

Famed hedged fund investor Bill Ackman said on Monday that he's winding down his SPAC Pershing Square Tontine ( NYSE: PSTH ) after failing to find a suitable company to take public.

Pershing Square Tontine ( PSTH ) will redeem all of its outstanding share s effective July 26 because the company won't consummate an initial business combination within the time period required. The company currently expects the per-share redemption price for the public shares will be ~$20.05.

Ackman's Pershing Square Tontine ( PSTH ) completed a $4 billion initial public offering in July 2020 in the biggest ever SPAC created. A year later the Ackman's SPAC, which had found Universal Music Group ( OTCPK:UMGNF ) as its target company and planned to take a 10% stake, announced it wouldn't go ahead with the music deal and would instead pursue other targets.

"Two years later, we are returning our $4 billion of capital in trust to shareholders as we have been unable to consummate a transaction that both meets our investment criteria and is executable," Ackman said in a Monday letter to investors.

Since Ackman's decision to end the deal for Universal Music, the SPAC market has deteriorated precipitously, especially this year, due to current market volatility in the IPO and SPAC market, as well as regulations targeting the SPAC industry and the general poor performance after SPACs have completed their deals and high redemption rates.

"We have been unsuccessful in consummating a deal over the last year largely due to the adverse market for SPAC merger transactions which has been driven by: (1) the extremely poor performance of SPACs that have completed deals during the last two years which has damaged market perceptions of going public by merging with a SPAC ..." Ackman wrote in the letter.

SPACs hit their peak in 2020, though Ackman is now joining several other prominent SPAC creators who have pulled back their deals in recent months including Betsy Cohen. Last Tuesday Online crypto brokerage EToro and the Cohen's SPAC FinTech Acquisition Corp. V ( FTCV ) confirmed that they mutually agreed to end a planned deal that would have taken EToro public.

FTCV had agreed in March 2021 to take stock- and cryptocurrency-trading platform eToro public via an $ 8.8 billion SPAC merger.

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