Electric Kool-Aid acid SPAC

23 Feb 2021 By Antony Currie Follow @AntonyMCurrie

Ex-Citi exec Michael Klein has struck the largest ever blank-cheque merger with a deal valuing Lucid Motors at $24 bln. Investors already think it’s worth more than double that. Lucid is a decent bet on battery power but its absurd multiple outstrips all rivals, including Tesla.

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Electric-vehicle maker Lucid Motors is going public via a merger with Churchill Capital IV, a special-purpose acquisition company set up by former Citigroup investment banker Michael Klein, the two companies said on Feb. 22.

The deal values Lucid at $11.8 billion. Assuming no investors pull out, the SPAC will provide $2.1 billion in cash to the target.

Lucid is raising $2.5 billion from other sources via a so-called PIPE structure, an acronym for private investment in a public company. The anchor investor is Saudi Arabia’s Public Investment Fund, which currently owns around 85% of Lucid. Other stakeholders include BlackRock, Fidelity Management & Research, Franklin Templeton, Neuberger Berman, Wellington Management and Winslow Capital Management.

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The deal values Lucid at $11.8 billion. Assuming no investors pull out, the SPAC will provide $2.1 billion in cash to the target.

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