Bill Ackman is no spurned lover.
The billionaire investor confirmed his blank-check company tried to strike a deal with IPO-bound Airbnb, but early-stage talks broke off after Airbnb filed confidentially to go public last month.
So, what happened?
“I wouldn’t use the word rebuff,” Ackman told Bloomberg TV.
Ackman’s Pershing Square Tontine Holdings is the largest-ever SPAC and it’s been courting companies since raising $4 billion in July. Ackman said he’s a fan of Airbnb — at least from the outside — but didn’t get a look at the company’s financials.
“We didn’t do a deep enough dive, frankly, to determine whether it’s a business we’d want to own and at what price we’d want to own it,” he said. He said Airbnb hasn’t ruled out a deal with a special purpose acquisition company but is leaning toward a traditional IPO.
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If it does, Airbnb is likely to go on a virtual IPO roadshow to drum up support from potential investors. For many suitors, the moment is a long time coming.
Under pressure to go public from early employees, Airbnb initially targeted a March IPO, but paused when the pandemic cost it $1 billion in bookings. In April, it secured $2 billion in debt and equity. Although it laid off 2,000 employees in May, Airbnb has benefited from a travel rebound this summer.
Ackman said a SPAC deal would give Airbnb the certainty of an IPO at a given valuation.
Airbnb was last valued at $18 billion, down from $31 billion in 2017. It generated $4.8 billion in 2019 revenue but lost $322 million during the first nine months of last year. In 2020, its second-quarter revenue dropped 67 percent to $335 million.
“You don’t give up anything by doing a deal with us,” said Ackman.
Companies that do traditional public offerings, he noted, don’t set the share price until the last day of their roadshow. “You’re taking ‘Behind door No. 3’ as opposed to the bird in hand, so to speak,” he said.
[Bloomberg TV] — E.B. Solomont