The New York Stock Exchange said on Friday that the date for the initial public offering of billionaire investor Bill Ackman’s new investment fund Pershing Square USA looked a little less clear. However, the fund said it was still going ahead with the offering.
The NYSE first said that Pershing Square USA’s IPO was “postponed to a date to be announced” in a notice that was part of a list of corporate actions. They did not give any other details. Later, the notice was changed to say that the IPO would happen “on a date to be announced.”
In a statement released on Friday, Pershing Square USA said it was “proceeding with its initial public offering.” The company did not say when the prices would go up, though. It said that each common share would cost $50 at the IPO.
The move pushes back an offering that was supposed to happen next week but whose funding goals were lowered earlier this week. A spokesperson for Pershing Square wouldn’t say more about whether the IPO had been pushed back to a later date than next week.
Under the code “PSUS,” the closed-end fund would trade on the New York Stock Exchange. An IPO for this type of fund can only offer a certain number of shares. In its plan to raise money, Pershing Square USA promised not to charge performance fees on gains. The money would be put into 12 to 15 large “durable growth companies.”
This week, an investor wrote a letter to institutional and high-net-worth investors that work with Ackman promoting the IPO. The investor talked about the track record of his hedge fund, Pershing Square Capital Management, and tried to answer any questions or worries that the investors might have.
He did say, though, that making the kind of offering that was being planned “requires a significant leap of faith.”
A statement on Thursday showed that Ackman asked more people to join the offering to make it stronger in that letter. “Get it done as soon as possible,” he wrote.
But Ackman said that the deal is only likely to bring in $2.5 billion to $4 billion, whereas he had first thought it could bring in up to $25 billion.
Ackman wrote in the letter, “To sum up, there is enormous sensitivity to the size of the transaction.” “Because the structure is new and closed-end funds have a very bad track record when it comes to trading, investors will have to take a big leap of faith and use good analysis and judgment to believe that this closed-end company will trade at a premium after the IPO, which very few companies have done in the past.”
“At first, investors thought the deal would be too big because of the $25 billion number in the news,” he said. “In the end, I think this “anchoring” will help the end result.”
