Airbnb spurned an approach by Bill Ackman to go public via a merger with his blank-cheque company, preferring to go forward with a traditional initial public offering, according to people briefed on the matter.
The two companies are no longer in talks but neither has closed the door to a deal in the future, in what would be the largest ever transaction for a special purpose acquisition company, they added.
The billionaire hedge fund manager is on the hunt for a “mature unicorn” after raising $4bn for his special purpose acquisition company Pershing Square Tontine Holdings in the largest such listing to date.
So-called Spacs, which have boomed in popularity this year, raise money from investors with the promise of taking an unspecified company public.
In a letter to investors last week, Mr Ackman said Pershing is in talks with a number of companies about a potential deal. “Uncertainty is the enemy of the IPO and the friend of a $5 billion Spac with the largest amount of committed capital,” he said.
It was unclear what valuation Mr Ackman’s proposal assigned Airbnb. In April, the investment firms Silver Lake and Sixth Street Partners purchased equity warrants giving the accommodation booking business an implied valuation of $18bn as part of a $1bn debt sale. The company had previously been valued as high as $31bn after raising capital in 2017.
Morgan Stanley and Goldman Sachs have been hired by Airbnb to manage the listing of the San Francisco-based company. In recent weeks, the banks have deployed additional advisers to deal specifically with Mr Ackman’s approach, said a person with knowledge of the matter.
Airbnb declined to comment on Mr Ackman’s approach. Under its current IPO timeline, the company is expected to go public after the November US presidential elections but before the end of the year.
One person briefed about the matter said that pursuing Mr Ackman’s offer now could provide greater certainty, given the risk of market volatility after the election.
DoorDash, the US food delivery start-up, has also rejected the idea of merging with a Spac in favour of raising money in a traditional IPO later this year, said one person close to its deliberations. The company declined to comment.
Bloomberg first reported on the talks between Airbnb and Mr Ackman.