A highly anticipated IPO of billionaire hedge fund manager Bill Ackman’s closed-end U.S. fund is being postponed, based on an update from the New York Stock Exchange. website.
Pershing Square USA Ltd. had already reduced the scale of its planned initial stock sale from a goal of about $25 billion to between $2.5 billion and $4 billion. Now the IPO has been postponed to a date yet to be announced, based on the NYSE’s website. The price of the offering was to be announced on Monday before it begins trading the subsequent day, based on terms of the deal previously seen by Bloomberg News.
Representatives for Pershing Square and NYSE declined to comment.
The notice got here sooner or later after Pershing Square USA filed a regulatory request To update with the U.S. Securities and Exchange Commission (SEC), which incorporates a letter he wrote to investors on July 24. In the letter, the top of Pershing Square Capital Management said that the corporate would reduce the expected proceeds from the deal and had received quite a few orders from a “diversified group of investors,” which incorporates Seth Klarman’s Baupost Group.
With a volume of $25 billion, Pershing Square USA would have been the biggest closed-end fund within the US. The price of the shares was set at $50 each, based on the documents.
In his July 24 letter, Ackman wrote that the “$25 billion in the media initially gave investors the impression that the deal was too big.” That anchoring could possibly be helpful for the underside line, he said.
Postponing closed-end fund offerings doesn’t occur often, except when market events result in stock market closures, says Kim Flynn, president of Chicago-based XA Investments, which runs a closed-end fund advisory practice.
“Typically, CEF sponsors take what they can afford and don’t risk delays,” Flynn said in an email.
Pershing Square has a European-listed fund that trades at a reduction to the underlying value of its assets – an issue that has plagued closed-end issues up to now. Analysts resembling David Cohne of Bloomberg Intelligence had said the fund had potential However, it’s trading at a premium to its net asset value.
Pershing Square, the management company that manages the closed-end funds and hedge funds, sold a ten percent stake in itself ahead of a possible IPO, based on a press release on June 3. The management company’s IPO could happen as early as late 2025 or 2026, Ackman said earlier this month in a conference call with potential investors within the U.S. closed-end fund.
