Billionaire investor Bill Ackman is reportedly considering the possibility of pursuing a deal with X Corp., owned by renowned entrepreneur Elon Musk, as part of his newly approved investment vehicle. The Wall Street Journal has revealed that Ackman's Pershing Square has received regulatory approval for a special purpose acquisition company (SPAC) known as Pershing Square SPARC Holdings. This vehicle targets private companies seeking to raise $1.5 billion or more and potentially taking them public.
While representatives for Pershing Square and X have not yet commented on the matter, Ackman expressed interest in including X as an option. In an interview with the Journal, he stated that X, formerly known as Twitter, would "absolutely" be one of the potential targets, although he is unsure if the tech company would be interested or if the deal would be feasible.
However, X currently faces the challenge of a substantial debt burden resulting from its privatization last year. With $12.5 billion still in debt, a group of seven banks find themselves responsible, according to Bloomberg. Ackman's new investment vehicle could potentially provide a solution for X and other companies in a similar position.
Pershing Square SPARC Holdings aims to target private equity-owned firms, businesses seeking initial public offerings, or divisions of public companies. Unlike traditional SPACs where sponsors raise money through an IPO of a shell company and then search for an acquisition target, Ackman's approach allows investors to purchase shares in a blank-check company after the target has been announced.
The billionaire investor has been waiting for the Securities and Exchange Commission's approval for his idea for approximately two years, and it was finally granted on Friday. With this new investment vehicle, Ackman seeks to identify and invest in companies like X, unlocking their potential for growth and success.