(Reuters) – Luxury electric vehicle maker Lucid Motors Inc. is nearing a deal to be made public at a valuation of approximately $ 12 billion after veteran dealer Michael Klein signed blank check acquisition initiate a funding effort to support the transaction. matter said Tuesday.
The merger between Lucid and Churchill Capital IV Corp of Klein would be the largest in a series of offers from electric vehicle manufacturers such as Nikola Corp and Fisker Inc. that have been made public by combining with special purpose acquisition companies ( SPAC).
Churchill Capital IV has begun talks with investors to raise more than $ 1 billion by selling shares in a public capital investment (PIPE) transaction for the deal with Lucid, sources said. It was added that the size of the PIPE could reach $ 1.5 billion or more depending on investor demand.
These funds would add to the $ 2 billion Churchill Capital IV raised in an initial public offering (IPO) in July on the New York Stock Exchange. Lucid and Klein agreed on the key terms of the deal, according to sources.
If the PIPE fundraiser concludes successfully, an agreement could be announced as early as this month, according to sources, who asked for anonymity to discuss the confidential details. Churchill Capital IV declined to comment. Lucid did not immediately respond to a request for comment.
Shares of Churchill Capital IV rose in the news and traded around 30% to $ 52.20.
Lucid, founded in 2007 as Atieva Inc. by former Tesla executive Bernard Tse and businessman Sam Weng, manufactures luxury electric vehicles. It was initially funded by Chinese and Silicon Valley investors, with additional funding from sponsors such as Chinese automaker BAIC Motor and Chinese technology company LeEco.
To help fund the construction of a U.S. assembly plant in Casa Grande, Arizona, Lucid was driven by a $ 1 billion investment in 2018 by the Saudi Public Investment Fund.
The share price of Churchill Capital IV has risen more than 300% since Bloomberg News reported in January that it was in talks to merge with Lucid.
SPAC, which Churchill IV likes, are shell companies that raise money in an IPO to merge with a private company that, as a result, is listed on the stock exchange.
The merger with a SPAC has emerged as a popular IPO alternative for companies that want to make themselves public with less regulatory control and more security over the valuation that will be achieved and the funds that will be raised.
Investors interested in SPAC are looking for electric vehicle startups, hoping to catch the upcoming Tesla Inc. While some offers like Fisker have been delivered at a good price for investors in SPAC, others like Nikola have given up on their short-term gains.
Klein has raised a number of SPACs that have offered business to companies, including health services company MultiPlan Corp. and analysis firm Clarivate Plc.
Report by Joshua Franklin in Miami and Anirban Sen in Bangalore; Edited by David Gregorio and Nick Zieminski