United States securities and exchange commission logo
May 22, 2023
William A. Ackman
Chief Executive Officer
Pershing Square SPARC Holdings, Ltd./DE
787 Eleventh Avenue, 9th Floor
New York, New York 10019
Re: Pershing Square
SPARC Holdings, Ltd./DE
Amended
Registration Statement on Form S-1
Filed April 26,
2023
File No. 333-261376
Dear William A. Ackman:
We have reviewed your amended registration statement and have the
following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Amended Registration on Form S-1 filed April 26, 2023
Summary, page 1
1. We note the disclosure
on page 9 and elsewhere regarding the material adverse
amendments that may
occur during the SPAR holder election period and closing period.
We also note the
disclosure that "during the SPAR Holder Election Period and the Closing
Period, in the event of
a Materially Adverse Amendment we will cause all previous
Elections of SPARs to
be revoked, return all funds from the Custodial Account that were
tendered at the Final
Exercise Price in connection with such Elections and hold or re-open
the SPAR Holder
Election Period for an additional 20 business days." Please clearly
disclose that you will
file a post-effective amendment to update the registration statement
in the event this were
to occur. Please also clarify how the ten months closing deadline
will be calculated if
this were to occur. Clarify whether the ten months would be
William A. Ackman
FirstName LastNameWilliam A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
Comapany
May NamePershing Square SPARC Holdings, Ltd./DE
22, 2023
May 22,
Page 2 2023 Page 2
FirstName LastName
calculated from the initial election period or the re-open period.
Finally, clearly disclose,
whether the SPARs will again be transferable and whether you
anticipate trading on the
OTC Markets if the election period is re-opened.
2. We note the disclosure on page 11 and elsewhere that the SPARs are not
transferrable
during the election period once the investor has made their election.
Please also clearly
disclose, as stated in your response letter responding to prior
comment 8 from our letter
dated September 9, 2022, that such SPARs will be tendered upon the
election.
Our Board may, in certain circumstances, withdraw and terminate the SPAR Holder
Election
Period early . . ., page 70
3. Please clarify the circumstances in which the Board would determine to
terminate
the SPAR Holder Election Period early, and how and when you would
notify SPAR
Holders of the early termination.
We may amend our Charter, bylaws, the Definitive Agreement . . ., page 72
4. Please reconcile disclosure in this risk factor that describes a SPAR
holder's right to
revoke an Election in the event of a Materially Adverse Amendment to
the Charter or
Definitive Agreement with revised disclosure pages 9 and 10, which
indicates that you
will revoke all elections and hold or re-open the SPAR Holder Election
period for an
additional 20 business days if you make a Materially Adverse Amendment
during the
SPAR Holder Election Period or the Closing Period.
Valuation of Sponsor Warrants, page 182
5. Where you state that the Black Scholes valuation includes a spot price
at the minimum
exercise price of $10 per share, please revise your disclosure to
clarify what is meant by
the term spot price. In particular, please describe to which security
the spot price refers.
6. Please provide additional disclosures regarding the assumptions used
in the valuation of
the sponsor warrants. For instance, we note you are assuming the
sponsor forward
purchase commitment of $1 billion. Please clarify whether this means
you are assuming
the total commitment under the forward purchase agreements is $1
billion or whether this
means you are assuming the committed forward purchase is $1 billion,
which would
indicate a final exercise price of $40 or more and Sponsor Warrant
exercise price of $48
or more. Please also expand upon the criteria used in determining the
volatility of the
post-combination company was estimated to be 25%, including the extent
to which such
post-combination companies considered included post-combination SPACs.
To the extent
you did not consider or minimally considered such companies in your
criteria, clarify
why. Please also clarify how and when you selected the blank check
companies whose
capital and post-combination equity value you observed in order to
determine the
historical multiple between available capital and equity value of the
merger targets.
Lastly, please clarify how you determined the estimate that 85% of
SPARs would be
exercised.
William A. Ackman
Pershing Square SPARC Holdings, Ltd./DE
May 22, 2023
Page 3
7. Where you state that you adjusted the value of the Sponsor Warrants to
take in to account
the probability of consummating a business combination, clarify whether
you took
transaction size in to account to inform this probability. If so, please
explain whether that
impacted the range of probability of transaction consummation at
companies in your
target market capitalization range. We note that you noted a "cumulative
percentage of
closed transactions" of approximately 70%.
8. Regarding your consideration of sponsor incentive restructurings in
completed blank
check company transactions, please clarify how your observations were
used to adjust
warrant value. We note your disclosure that the company used the expected
incentive
renegotiation percentage of historical SPACs and the currently observed
concessions in
the market "of above 50%, but it is unclear whether this reduced the
warrant value and by
what percentage.
Exhibits
9. We note the removal of the Letter Agreement from the Exhibits Index.
Please advise, as
we continue to note references to this agreement throughout the
prospectus, and such
agreement appears to be material.
General
10. We note the prospectus cover page states that you "refer to the common
stock of the post-
combination company, which, depending on the form our business
combination takes,
may be an entity other than our company, as 'Public Shares.'" Please
reconcile with the
definition of Public Shares in the summary on page 3 as "'Public Shares'
are to the shares
of the post-combination company issuable upon the exercise of SPARs."
You may contact Ameen Hamady at 202-551-3891 or Jennifer Monick at
202-551-3295
if you have questions regarding comments on the financial statements and
related
matters. Please contact Pam Howell at 202-551-3357 or Pam Long at 202-551-3765
with any
other questions.
Sincerely,
FirstName LastNameWilliam A. Ackman
Division of Corporation
Finance
Comapany NamePershing Square SPARC Holdings, Ltd./DE
Office of Real Estate &
Construction
May 22, 2023 Page 3
cc: Gregory P. Patti, Jr.
FirstName LastName