Market Overview

Airbnb Snubs Billionaire Bill Ackman's Offer To Go Public Via SPAC Merger: Report

Airbnb Snubs Billionaire Bill Ackman's Offer To Go Public Via SPAC Merger: Report

Airbnb Inc. brushed off a merger with Pershing Square Tontine (NYSE: PSTH-U), the blank-check company owned by billionaire investor Bill Ackman, Bloomberg reported Wednesday.

What Happened: No discussions are taking place between the two companies and early stage talks came to a halt after Airbnb filed confidentially for an initial public offering last month, people familiar with the matter told Bloomberg.

The home rental firm prefers a traditional IPO but has not completely ruled out a merger with Ackman’s special purpose acquisition company, the unnamed sources revealed.

The SPAC has $5 billion in capital including a $1 billion in capital committed by the billionaire’s Pershing Square Capital Management, LP, Ackman said in a letter to investors, as reported by Bloomberg.

Ackman reportedly listed three U.S. IPOs in the last ten years worth $5 billion or more — Alibaba Group Holding Ltd (NYSE: BABA), Uber Technologies Inc (NYSE: UBER), and Facebook Inc (NASDAQ: FB) — and commented in his letter that a sale of that magnitude is difficult. 

“Uncertainty is the enemy of the IPO and the friend of a $5 billion SPAC with the largest amount of committed capital,” he said, alluding to the large size of the vehicle.

Why It Matters: Airbnb’s listing has been long-anticipated and till earlier last month there was no clarity on what route the firm would take to go public.

In August, the vacation home rental firm finally filed a draft registration statement with the Securities and Exchange Commission proposing an IPO.

Morgan Stanley (NYSE: MS) and Goldman Sachs Group Inc (NYSE: GS) are said to be the potential underwriters for the listing, according to the Wall Street Journal.

The company’s losses piled up in the second quarter as revenues declined to $335 million, a drop of 67% from $1 billion in the same period last year.

The COVID-19 pandemic has severely impacted the travel sector since March and caused Airbnb’s bookings to fall 90%, according to Bloomberg's sources.

Price Action: Pershing shares closed about 1.8% higher at $21.87 on Wednesday.

Photo courtesy: Fabien Maurin on Unsplash


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Posted-In: Airbnb Bill Ackman Blank check company Bloomberg SPACNews Offerings IPOs Best of Benzinga

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