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Bill Ackman has postponed the initial public offering of his US investment fund, Pershing Square USA, days after he acknowledged he would raise far less money than originally planned and pleaded with investors to back the deal.
The delay is a stunning setback for the billionaire hedge fund manager and a well-known figure in the investment world, who had previously expected to raise $25 billion in what would have been one of the biggest IPOs in history. It appears to be linked to comments he made in a letter to investors earlier this week that went beyond the information he provided to regulators in his fund’s IPO filing and potentially violated rules on investor communications.
The letter hinted at possible stock trading activity. Initial public offeringAttention is also on the growing backlog of deals.Banks leading the listing, including Citigroup, UBS, Bank of America and Jefferies, are waiting to see whether any warning signs are raised by U.S. securities regulators, according to two people familiar with the deal.
A third person, referring to the letter, said there had been “issues” with the document. The delay is expected to last several days, the people said, adding that the company still plans to go public.
Pershing Square issued a statement late Friday saying it is “moving forward with its initial public offering” and that it will announce the price at a later date. A company representative declined to comment further in response to specific questions about the letter or potential regulatory issues.
Citi and Bank of America declined to comment, while UBS and Jefferies did not immediately respond.
“We believe the most important factor in creating long-term value for Pershing Square will not be the size of the PSUS IPO, but rather how it trades in the market.” Ackman “This transaction is therefore all about a successful IPO from day one and a successful transaction at a premium thereafter,” the letter states.
“We believe U.S. retail will be a significant source of aftermarket demand,” he added.
The Securities and Exchange Commission limits companies’ marketing activities before they go public to protect investors, and companies are generally cautious about providing forward-looking guidance that could expose them to liability.
The New York Stock Exchange posted a short message on its website saying the IPO had been postponed but did not provide further details.
Pershing Square USA, which plans to go public under the ticker symbol PSUS, denied Ackman’s comments in regulatory filings including Thursday’s letter.
Ackman is Downward revision The target size of the IPO has been raised to between $2.5 billion and $4 billion, down from up to $25 billion the previous week, according to a letter sent to Pershing Square Holdings investors.
“Now is the time when I can make a significant contribution to Pershing Square by participating in the PSUS recruitment and providing instructions to the bank, and the sooner the better,” he said in the letter.
He also said potential investors had expressed doubts about whether PSUS shares would trade at a price above the net assets the company manages, a key point in Mr. Ackman’s marketing efforts in recent weeks.
The company was set to price its IPO on Monday, with shares set to begin trading on the Big Board the next day. The closed-end fund plans to invest in large companies that Ackman and his team believe are undervalued and have a competitive advantage.
Additional reporting by James Fontanella-Kahn, Amelia Pollard and Arash Masoodi
