The Ackman (SPAC) Variant

Pershing Square SPARC Holdings Ltd, the special purpose acquisition rights company of billionaire investor Bill Ackman, on Friday filed for a public offering of its warrants in the United States.

The SPARC structure has been devised by Ackman and has never been tested on Wall Street before. The move comes months after the prolific dealmaker abandoned a deal for his $4 billion blank-check company to buy a 10% stake in Universal Music Group, due to concerns from the U.S. Securities and Exchange Commission.

The SPARC, an affiliate of Ackman's Pershing Square Tontine Holdings Ltd (PSTH), will offer 244.4 million subscription warrants, it said in its filing.

Each warrant will give the holder the right to purchase common stock at a minimum price of $10 per share.

The listing will require the SEC to approve a proposal submitted by the New York Stock Exchange, to allow listing and trading of subscription warrants by acquisition vehicles.

If approved, the warrants will be listed on the NYSE, the company said.

We will distribute 200,000,000 SPARs to the holders of the Class A common stock of PSTH and 44,444,444 SPARs to the holders of the distributable redeemable warrants of PSTH (the “Distribution”), based on record ownership as of (the “Distribution Record Date”), which we expect will be on or about the date that PSTH consummates its initial business combination or liquidates its trust account and returns funds to its public stockholders. If PSTH has completed its initial business combination at the time of the Distribution, 200,000,000 SPARs will be distributed on a pro rata basis in respect of the shares of PSTH Class A common stock that remain outstanding after PSTH stockholders have had the opportunity to redeem their shares in connection with PSTH’s initial business combination. If PSTH does not consummate an initial business combination and liquidates its trust account, one SPAR will be distributed in respect of each of the 200,000,000 shares of PSTH common stock outstanding. In each case, two SPARs will be distributed in respect of each of the 22,222,222 outstanding distributable redeemable warrants of PSTH.

The SPARs will become exercisable shortly before the consummation of our business combination, as described below. The SPARs will expire upon the earlier of (i) an Early Termination of our company (as defined below), (ii) the consummation of our business combination or (iii) the date that is 10 years from the distribution of the SPARs.